<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 1, 1996
REGISTRATION NO. 333-09621
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
MT ACQUISITION CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3596 APPLIED FOR
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
IM LANGACHER, P.O. BOX ROBERT F. SPOERRY
MT-100 MT ACQUISITION CORP.
CH 8606 GREIFENSEE, PARK AVENUE TOWER
SWITZERLAND 65 EAST 55TH STREET, 27TH
41-1-944-22-11 FLOOR
(ADDRESS, INCLUDING ZIP NEW YORK, NEW YORK 10022
CODE, AND TELEPHONE (212) 644-5900
NUMBER, INCLUDING AREA (NAME, ADDRESS, INCLUDING
CODE, OF REGISTRANT'S ZIP CODE, AND
PRINCIPAL EXECUTIVE TELEPHONE NUMBER,
OFFICES) INCLUDING AREA CODE,
OF AGENT FOR SERVICE FOR
REGISTRANTS)
</TABLE>
METTLER-TOLEDO HOLDING INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3596 APPLIED FOR
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
IM LANGACHER, P.O. BOX
MT-100
CH 8606 GREIFENSEE,
SWITZERLAND
41-1-944-22-11
(ADDRESS, INCLUDING ZIP
CODE, AND TELEPHONE
NUMBER, INCLUDING AREA
CODE, OF REGISTRANT'S
PRINCIPAL EXECUTIVE
OFFICES)
</TABLE>
------------------------
Copies to:
<TABLE>
<S> <C>
TIMOTHY E. PETERSON, ESQ. DAVID A. BRITTENHAM, ESQ.
FRIED, FRANK, HARRIS, SHRIVER & DEBEVOISE & PLIMPTON
JACOBSON 875 THIRD AVENUE
ONE NEW YORK PLAZA NEW YORK, NEW YORK 10022
NEW YORK, NEW YORK 10004 (212) 909-6000
(212) 859-8000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. /x/
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 1, 1996
PROSPECTUS [LOGO]
$115,000,000
METTLER-TOLEDO, INC.
GUARANTEED ON A SENIOR SUBORDINATED BASIS BY
METTLER-TOLEDO HOLDING INC.
% SENIOR SUBORDINATED NOTES DUE 2006
------------------------
MT Acquisition Corp., a Delaware corporation (the 'Issuer') was organized
by AEA Investors Inc. to effect the acquisition of companies constituting the
Mettler-Toledo Group from Ciba-Geigy AG. The % Senior Subordinated Notes due
2006 (the 'Notes') are being offered hereby (the 'Offering') in connection with
the Acquisition. The net proceeds from the Offering will provide a portion of
the financing for the Acquisition. The Offering will occur concurrently with,
and will be conditioned upon, the consummation of the Acquisition. The Offering
is contingent upon the assumption by Mettler-Toledo, Inc. of all liabilities
under the Securities Act of 1933, as amended, of MT Acquisition Corp., as issuer
of the Notes, which assumption will be executed simultaneously with the issuance
of the Notes. Following the issuance of the Notes, MT Acquisition Corp. will be
merged with and into Mettler-Toledo, Inc., and Mettler-Toledo, Inc. will become
the successor obligor of the Notes after such merger. See 'The Acquisition.'
Interest on the Notes will be payable semiannually on and
of each year, commencing , 1997. The Notes will not be
redeemable prior to , 2001, except that at any time on or
prior to , 1999, the Issuer, at its option, may redeem up to $40
million of the originally issued Notes with the proceeds of one or more Public
Equity Offerings, at a cash redemption price of % of the principal amount
thereof, plus accrued and unpaid interest, if any, to the redemption date;
provided that after giving effect to any such redemption, at least $75 million
of the Notes remains outstanding. On and after , 2001, the Notes
may be redeemed, in whole or in part, at the option of the Issuer at the
redemption prices set forth herein plus accrued and unpaid interest, if any, to
the redemption date. Upon a Change of Control, each holder of Notes will have
the right to require the Issuer to repurchase in whole or in part such holder's
Notes at a cash purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the repurchase date. The Credit
Agreement will limit the Issuer's ability to repurchase any Notes, whether on a
Change of Control or otherwise. Such inability may result in a default under the
Indenture and the Credit Agreement. Upon a default under any Senior
Indebtedness, the subordination provisions of the Indenture would likely
restrict payments to holders of Notes until such Senior Indebtedness is
discharged or paid in full. See 'Description of Notes.'
The Notes will be unsecured senior subordinated indebtedness of the Issuer
and, as such, will be subordinated in right of payment to all existing and
future Senior Indebtedness of the Issuer, including indebtedness under the
Credit Agreement. The Notes will rank pari passu with senior subordinated
indebtedness, if any, of the Issuer and will rank senior to subordinated
indebtedness, if any, of the Issuer. In addition, a substantial majority of the
business operations of the Company will be conducted through the subsidiaries of
the Issuer, and the Notes will also be effectively subordinated to all existing
and future liabilities of the Issuer's subsidiaries. The Notes will be fully and
unconditionally guaranteed on a senior subordinated basis (the 'Holding Note
Guarantee') by Mettler-Toledo Holding Inc. ('Holding'), a Delaware corporation,
the only asset of which is 100% of the outstanding capital stock of the Issuer.
The Holding Note Guarantee will be an unsecured obligation of Holding and will
be subordinated to all existing and future senior indebtedness of Holding,
including its obligations under its guarantee in respect of the Credit
Agreement. At June 30, 1996, on a pro forma basis after giving effect to the
Acquisition and the sale of the Notes and the application of the estimated net
proceeds therefrom, the aggregate amount of Senior Indebtedness and indebtedness
of the Issuer's subsidiaries (excluding intercompany indebtedness) that would
have effectively ranked senior to the Notes would have been approximately $330.8
million, with a weighted average interest rate of 7.4%.
Settlement of the Notes will be made in immediately available funds. The
Notes will trade in the Same-Day Funds Settlement System of The Depository Trust
Company ('DTC'), and, to the extent that secondary market trading activity in
the Notes is effected through the facilities of DTC, such trades will be settled
in immediately available funds. All payments of principal and interest will be
made by the Issuer in immediately available funds.
SEE 'RISK FACTORS' BEGINNING ON PAGE 14 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN EVALUATING AN INVESTMENT
IN THE NOTES.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(3)
<S> <C> <C> <C>
Per Note.... % % %
Total....... $ $ $
</TABLE>
(1) Plus accrued interest, if any, from , 1996.
(2) The Company and Holding have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended. See 'Underwriting.'
(3) Before deducting expenses payable by the Company estimated at $ .
------------------------
The Notes are offered by the Underwriters, subject to prior sale, when, as
and if issued to and accepted by them, subject to approval of certain legal
matters by counsel for the Underwriters and certain other conditions. The
Underwriters reserve the right to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is expected that delivery of the Notes
will be made through the book-entry facilities of DTC on or about ,
1996.
------------------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
LEHMAN BROTHERS
SCOTIA CAPITAL MARKETS (USA) INC.
------------------------
The date of this Prospectus is , 1996.
<PAGE>
Text Description of Artwork
Heading: 'METTLER TOLEDO The leader in weighing instruments.'; Three
photographs captioned 'Laboratory,' 'Industry and Retail.' Company logo.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. DURING THIS
OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING IN THE
DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR THE
ACCOUNTS OF OTHERS IN THE NOTES PURSUANT TO EXEMPTIONS FROM RULES 10B-6, 10B-7
AND 10B-8 UNDER THE SECURITIES EXCHANGE ACT OF 1934.
Mettler-Toledo(Registered), Mettler(Registered), Ingold(Registered),
Garvens(Registered), Ohaus(Registered), DeltaRange(Registered) and
DigiTOL(Registered) are registered trademarks of the Company and ID
20(Trademark), Brickstone(Trademark), Spider(Trademark), TrimWeigh(Trademark),
MentorSC(Trademark), MultiRange(Trademark) and TRUCKMATE(Trademark) are
trademarks of the Company.
<PAGE>
Heading: 'No 1 In Weighing And Related Measurement Instruments.'
Heading: 'METTLER TOLEDO The determining factor in every lab.' Background
photograph captioned 'Laboratory' with four inset photographs depicting the
Company's laboratory products in use captioned: 'Precision balances, in use at
Bayer'; 'Density- and refractometers, in use at Coca-Cola'; 'Thermal analysis
system, in use at Ciba'; and 'Titrator, in use at Procter & Gamble.'
Heading: 'METTLER TOLEDO The solution for every industrial weighing
application.' Background photograph captioned 'Industry' with four inset
photographs depicting the Company's industrial products in use captioned:
'Products weighed and labelled in process, all fully automatically. In use at
Nestl'; 'Exact dimension and weight data for freight calculation. In use at
TNT'; 'Mobile counting scales for inventory control, packaging and shipping or
receiving. In use at Philips'; and 'Goods weighed directly in vehicles, even in
motion.'
Heading: 'METTLER TOLEDO The solution for efficient management of perishable
goods.' Background photograph captioned 'Retail' with four inset photographs
depicting the Company's food retailing products in use captioned: 'Retail scales
with dialogue capability and active sales aids. In use at Tengelmann'; 'Service
counter scales support the electronic bookkeeping of all sales data. In use at
Kroger'; 'The right solution in prepackaging and price labelling, stand-alone or
networked. In use at Safeway'; and 'Check-out systems compatible with scanner,
cash register and networkable from scale to central computer. In use at Rewe.'
Heading: 'Quality for METTLER TOLEDO is more than technical precision and
premier products. It is our state of mind.' Company Logo.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements,
including the related notes, appearing elsewhere in this Prospectus. Unless the
context otherwise requires, the 'Issuer' means MT Acquisition Corp. and, after
giving effect to the transactions described in 'The Acquisition' (which are
referred to herein collectively as the 'Acquisition'), Mettler-Toledo, Inc. The
'Company' or 'Mettler-Toledo' as used in this Prospectus means the Issuer and
its subsidiaries, after giving effect on a pro forma basis to the transactions
described in 'The Acquisition'. The 'Mettler-Toledo Group' refers to the group
of companies being acquired pursuant to the Acquisition. Unless otherwise
indicated, industry data contained herein is derived from publicly available
industry trade journals, government reports and other publicly available
sources, which the Company has not independently verified but which the Company
believes to be reliable, and where such sources were not available, from Company
estimates, which the Company believes to be reasonable, but which cannot be
independently verified. As used in this Prospectus, '$' refers to U.S. dollars
and 'SFr' refers to Swiss francs.
THE COMPANY
GENERAL
Mettler-Toledo is the world's largest manufacturer and marketer of weighing
instruments for use in laboratory, industrial and food retailing applications.
The Company focuses on the high value-added segments of the weighing instruments
market by providing solutions for specific applications. The Company also
manufactures and sells certain related laboratory measurement instruments, with
one of the top three market positions worldwide in titrators, thermal analysis
systems, pH meters and lab reactors. Mettler-Toledo services a worldwide
customer base, with 1995 net sales of $850 million, which were derived 52% in
Europe, 37% in North and South America and 11% in Asia and other markets. The
Company has a global manufacturing presence, with manufacturing facilities in
Europe, the United States and Asia.
Weighing is one of the most broadly used measuring techniques, and its
results are often used as the basis of commercial transactions. The Company's
products are used in the laboratory as an integral part of the research process;
in industry for materials preparation, filling, counting and dimensioning; and
in food retailing for preparation, portioning and inventory control. Customers
include pharmaceutical, biotechnology, chemical, cosmetics, food and beverage,
postal, jewelry, metals, logistics, shipping and food retailing businesses, as
well as schools, universities and government and private standards labs.
MARKET LEADERSHIP
Mettler-Toledo is the only company to offer weighing products for
laboratory, industrial and food retailing applications throughout the world. The
Company believes that in 1995, the global market for weighing instruments for
laboratory, industrial and food retailing applications was approximately $4.5
billion and that the Company held a market share more than two times greater
than its nearest competitor. The Company believes that, in 1995, it had an
approximate 40% market share of the global market for laboratory balances,
including the largest market share in each of Europe, the United States and Asia
(excluding Japan), and one of the three leading positions in Japan. In the
industrial and food retailing market, the Company believes it has the largest
market share in Europe and in the United States. In Asia, the Company has a
substantial, rapidly growing industrial and food retailing business supported by
its established manufacturing presence in China. The Company attributes its
worldwide market leadership position to the following competitive strengths:
Brand Recognition. The Mettler-Toledo brand name is identified worldwide
with accuracy, reliability and innovation. The Company's brand name is so well
recognized that laboratory balances are often referred to as 'Mettlers.' Brand
recognition is important because weighing applications significantly impact
customers' product quality, productivity, cost and regulatory compliance. As a
result, customers tend to emphasize accuracy, product reliability, technical
innovation, reputation and past experience with a manufacturer's products when
making their purchasing decisions for weighing instruments.
Technological Innovation. Mettler-Toledo has a long and successful track
record of innovation, as demonstrated by the invention of the single-pan
analytical balance in 1945 and the introduction of the first fully electronic
precision balance in 1973. The Company has continued to be at the forefront of
weighing technology
3
<PAGE>
with several recent innovations, including its ID 20 terminal and 'Brickstone'
weighing sensor technology. The Company has particular expertise in sensor
technology, electronics and software, and in the industrial design of
measurement instruments. The Company believes it is the global leader in
providing sophisticated features, such as data-handling and storage
capabilities, integration into management information systems and improved
productivity through automation, all of which are increasingly important to
users of weighing instruments. The Company devotes substantial resources to
research and product development in order to maintain its competitive advantage
in technological innovation.
Comprehensive Product Range. Mettler-Toledo manufactures a more
comprehensive range of weighing instruments than any of its competitors. The
Company's broad product line addresses a wide range of weighing applications
across many industries and regions. Within an industry, the Company offers
multiple products to meet customers' requirements. Its broad range of products
allows the Company to leverage its manufacturing and distribution capabilities,
sales and service organization and product development activities.
Global Sales and Service. The Company has the only global sales and
service organization among weighing instruments manufacturers. At June 30, 1996,
this organization consisted of 2,700 employees organized into locally based,
customer-focused groups that provide prompt service and support to the Company's
customers and distributors in virtually all major markets across the globe. The
local focus of the Company's sales and service organization enables the Company
to adapt marketing and service efforts to different cultural and economic
conditions, and provides feedback for manufacturing and product development.
Largest Installed Base. The Company believes that it has the largest
installed base of weighing instruments in the world. Service revenues from this
installed base provide a strong, stable source of recurring revenue,
representing approximately 17% of net sales in 1995. The Company believes that
its installed base represents a competitive advantage with respect to repeat
purchases. Customers tend to remain with an existing supplier who can provide
accurate and reliable products and related services. In addition, switching to a
new instrument supplier entails additional costs to the customer for training,
spare parts, service and system integration requirements. Close relationships
and frequent contact with its broad customer base provide the Company with sales
leads and new product and application ideas.
Diversity of Revenue Base. The Company's revenue base is widely
diversified by geographic region, by type of customer and by individual
customer. The Company's broad range of product offerings is utilized in many
different industries, from chemicals and pharmaceuticals to food processing to
food retailing to transportation. The Company supplies customers in over 100
countries, and no one customer accounted for more than 2% of 1995 net sales. The
Company's diverse revenue base reduces its exposure to regional or industry-
specific economic conditions.
INDUSTRY TRENDS
The Company believes that the weighing instruments market is being
influenced by several industry trends. First, customers are demanding products
for industry-specific applications, with significant data management
capabilities designed to be integrated into business processes and to improve
productivity. Second, quality manufacturing and laboratory requirements are
becoming more standardized. For example, ISO 9001 standards require
manufacturers to utilize certified measurement instruments, and good laboratory
practices require each step in the research process to be recorded with
certified instruments so that results can be accurately traced and reproduced.
Third, increased harmonization of national weighing standards, particularly in
the European Union, has facilitated multinational manufacturers' ability to meet
local regulatory requirements and provides broader-based markets for their
product lines. Most importantly, there has been significant growth in demand in
emerging markets as these economies develop and global manufacturing customers
shift production operations to these markets. As a result, customers in these
emerging markets require additional and more sophisticated weighing instruments.
Global manufacturers operating in emerging markets often utilize the same
suppliers that service their needs in other markets. The Company believes that
its global operations position it to take advantage of these industry trends.
4
<PAGE>
BUSINESS STRATEGY
The Company's strategy is to enhance its position as global market leader
by providing the most comprehensive, innovative and reliable weighing solutions.
The Company plans to actively pursue the following initiatives to increase
revenues and profitability:
Product Innovation. The Company intends to continue to invest in product
innovation in order to provide technologically advanced products to its
customers for existing and new applications. Over the last three calendar years,
the Company invested $149 million in research and development, which has
resulted in a pipeline of new and updated products. A recent example of the
Company's extensive product development efforts is the innovative ID 20 terminal
for use in the Company's range of industrial scales. ID 20 includes the first
personal computer interface to be certified by weights and measures regulators,
combined with an ergonomically designed personal computer terminal for
industrial applications. Other recent examples include a new moisture analyzer,
a dimensioning system for logistics applications that combines volume and weight
measurements, a new generation of postal meters and a mid-range food retailing
scale. The Company is also focused on innovations that can reduce its production
costs. For example, the Company's new 'Brickstone' weighing sensor technology,
in addition to providing greater accuracy, reduces from approximately 100 to
approximately 50 the number of parts in the sensor, and thus significantly
reduces manufacturing costs and the time and expense of design changes.
Increased Penetration of Developed Markets. The Company intends to
leverage its brand name and existing infrastructure to further penetrate
selected geographic regions and product lines in Europe, the United States and
Japan. For example, in European food retailing products, the Company plans to
further expand from its strong base in German-speaking countries into other
countries. In addition, the Company plans to increase penetration with shipping
and logistics businesses by introducing a new weighing and dimensioning product.
The Company also continues to take advantage of the standardization of weights
and measures, both in the European Union and worldwide, which favors a
manufacturer with a global presence, such as the Company.
Further Expansion in Emerging Markets. The Company believes that global
recognition of the Mettler-Toledo brand name and the Company's global sales and
service organization position the Company to take advantage of continued growth
opportunities in emerging markets. In 1995, the Company had net sales of $69
million in Asia (excluding Japan) and Latin America, representing 8% of net
sales. In Asia (excluding Japan), it is the market leader in laboratory weighing
instruments and has a substantial and rapidly growing industrial and food
retailing business. The Company has been operating in China since 1987 through a
60%-owned joint venture, which owns one manufacturing facility, and the Company
plans to complete construction of a new wholly owned manufacturing facility in
Shanghai by the end of 1996. The Company believes that this manufacturing
infrastructure, as well as its sales and service organization in Asia and its
already substantial sales in Asia and Latin America, position it to take
advantage of further growth opportunities in emerging markets.
Reengineering and Cost Reductions. Over the last three years, the Company
has been successful at increasing its margins, despite negative currency
effects. These increases have been achieved through, among other things,
increased workforce flexibility, a reduction in its overall workforce, a shift
in the mix of its workforce toward higher growth, lower cost regions and the
introduction of new products with lower manufacturing costs. The Company is
currently implementing two projects which are aimed at reducing warehouse
capacity, improving inventory turnover and reducing materials handling costs.
The Company is restructuring the order and product delivery process in Europe to
enable the Company to deliver many of its products to its customers directly
from the manufacturing facility within several days. The Company is also
streamlining its European spare parts inventory management system. In addition
to continuing these cost-cutting efforts, the Company is also evaluating its
business strategy as an independent company after the Acquisition and believes
that it can support continued sales growth while further reducing its overall
cost base. In July 1996, in anticipation of the consummation of the Acquisition,
the Company announced the closure of its Westerville, Ohio facility. In
addition, the Company will implement a targeted workforce reduction by the end
of 1996. The Company expects that these two additional projects will result in
annual cost reductions of $8.3 million.
Pursue Selected Acquisition Opportunities. The Company has a proven record
of acquiring and integrating businesses into existing operations. As an
independent company, Mettler-Toledo plans to more actively pursue additional
product lines and distribution channels through acquisitions, strategic
alliances and joint ventures. The
5
<PAGE>
Company believes that by taking advantage of its brand name and global sales and
service organization it can expand distribution of acquired product lines and
operate acquired businesses more efficiently.
The mailing address of the Company's and Holding's principal executive
offices is Im Langacher, P.O. Box MT-100, CH-8606, Greifensee, Switzerland. Its
telephone number is 41-1-944-22-11.
RISK FACTORS
Prospective purchasers of the Notes should carefully consider all of the
information contained in this Prospectus before making an investment in the
Notes. In particular, prospective purchasers should carefully consider the
factors set forth herein under 'Risk Factors.' These risks include the effect of
the Company's substantial indebtedness on operations and liquidity; restrictions
on operations under the Credit Agreement and the Indenture; the risk of future
losses; subordination of the Notes and the Holding Note Guarantee; the unsecured
status of the Notes and the encumbrance of the Company's assets to secure Senior
Indebtedness; the Company's dependence on earnings of subsidiaries; lack of
subsidiary guarantees of the Notes; the absence of independent operations of
Holding; the risk of the inability to finance a repurchase of the Notes upon a
Change of Control; risks associated with currency fluctuations; risks associated
with international operations; risks associated with competition and
improvements in technology by competitors; risks due to significant sales to the
pharmaceutical and chemical industries; the Company's lack of prior operations
as an independent company; control of the Company by AEA Investors and certain
of its investor-shareholders and/or certain members of its management; certain
benefits to AEA Investors; reliance on key management; risk of liability under
environmental laws; certain regulatory approvals in connection with the
Acquisition; the risk of fraudulent transfer liability; and the absence of a
public market for the Notes and the possible price volatility of the Notes.
THE ACQUISITION
MT Acquisition Corp. and Holding were formed by AEA Investors Inc. ('AEA
Investors') to effect the Acquisition of the Mettler-Toledo Group from
Ciba-Geigy AG ('Ciba') and its wholly owned subsidiary, AG fur
Prazisionsinstrumente ('AGP'). The Acquisition of the Mettler-Toledo Group will
be accomplished through the purchase of all of the outstanding capital stock of
Mettler-Toledo, Inc. and Mettler-Toledo Holding AG ('Swiss Subholding'), which,
together with their respective subsidiaries, will constitute the entire Mettler-
Toledo Group. At the closing of the Acquisition (the 'Closing'): (i) $190.0
million will be contributed to MT Investors Inc. ('MT Investors'), the parent
company of Holding, by AEA Investors, its senior management and its
investor-shareholders, the management and certain employees of the
Mettler-Toledo Group, and Ciba (which will purchase a 5% interest); (ii) MT
Investors will contribute such funds to Holding, which will in turn contribute
such funds to MT Acquisition Corp.; (iii) MT Acquisition Corp. will borrow
$135.0 million of term loans under the Credit Agreement and will complete the
Offering of the Notes, and Holding will guarantee the Notes; (iv) MT Acquisition
Corp. will acquire the stock of Mettler-Toledo, Inc. and Swiss Subholding from
AGP; (v) Swiss Subholding will borrow $195.8 million under the Credit Agreement,
including $140.0 million of term loans and $55.8 million under a revolving
credit facility; (vi) Mettler-Toledo, Inc. and Swiss Subholding will repay
intercompany indebtedness to AGP and its affiliates (which aggregated $182.4
million at June 30, 1996); and (vii) MT Acquisition Corp. will be merged with
and into Mettler-Toledo, Inc. As a result of these transactions, Mettler-Toledo,
Inc. will succeed to MT Acquisition Corp.'s obligations under the Notes and the
Credit Agreement and will be the primary obligor of the Notes. Mettler-Toledo,
Inc. will be a wholly owned subsidiary of Holding, and Swiss Subholding will be
a wholly owned subsidiary of Mettler-Toledo, Inc. Following the Acquisition,
$109.2 million will be available for additional borrowings under the revolving
credit facility under the Credit Agreement and under local working capital
facilities. Management and certain employees of the Company are expected to own
at least 16.5% of the equity of MT Investors on a fully diluted basis, including
their investments in common stock of MT Investors and options to purchase
additional shares of such common stock to be granted in connection with the
Acquisition.
6
<PAGE>
The following table sets forth the estimated sources and uses of funds for
the Acquisition as if the Closing had occurred on June 30, 1996. (Actual amounts
at Closing will vary due to changes in currency exchange rates and changes in
certain balance sheet items subsequent to June 30, 1996.)
<TABLE>
<CAPTION>
AMOUNT
SOURCES OF FUNDS: (IN THOUSANDS)
<S> <C>
Credit Agreement:
Term loans(1)............................................... $275,000
Revolving credit facility(2)(3)(4)(5)....................... 55,829
Gross proceeds of the Notes.................................... 115,000
Equity contribution(3)......................................... 190,000
Cash on hand to be applied in the Acquisition(3)(4)............ 40,935
--------------
Total Sources............................................... $676,764
--------------
--------------
<CAPTION>
USES OF FUNDS:
<S> <C>
Acquisition price(5)........................................... $421,691
Repayment of net indebtedness to Ciba and
affiliates(4)(6)(7)......................................... 182,448
Repayment of bank and other loans(4)(7)........................ 38,625
Fees and expenses.............................................. 34,000
--------------
Total Uses.................................................. $676,764
--------------
--------------
</TABLE>
- ------------------
(1) Will consist of (i) $100,000 of Term A Loans to be denominated in various
currencies; (ii) $75,000 of Term B Loans to be denominated in U.S. dollars;
(iii) $80,000 of Term C Loans to be denominated in U.S. dollars; and (iv)
$20,000 of Term D Loans to be denominated in U.S. dollars. See 'Description
of Credit Agreement.'
(2) To be denominated in various currencies. See 'Description of Credit
Agreement.'
(3) Up to $7,500 of an aggregate $15,000 to be contributed by certain of the
Company's employees to MT Investors may be contributed after Closing. If
less than $7,500 is so contributed by the Company's employees by December
31, 1996, the balance will be contributed by AEA Investors and/or its
investor-shareholders. At Closing, cash on hand or additional borrowings
under the revolving credit facility under the Credit Agreement will be used
pending receipt of the proceeds from any deferred equity contributions. Ciba
will contribute $9,500 (5%) of the total $190,000 of equity contributions.
(4) Amounts at June 30, 1996. Actual amounts at Closing will vary.
(5) Acquisition price consists of $331,650 of purchase price and $90,041 of
pre-Closing dividends to AGP. In connection with such dividends, certain
members of the Mettler-Toledo Group will be subject to Swiss withholding
taxes in the amount of SFr 37,850, which amount will be fully refunded
following Closing. The amount of such withholding taxes will be funded
pending receipt of such refund through borrowings under the revolving credit
facility. Such temporary borrowings are not reflected in the table.
(6) Net of intercompany indebtedness due from Ciba and affiliates, payable at
Closing in Swiss francs.
(7) For information regarding interest rates, maturities and other principal
terms of indebtedness being repaid at Closing, see Notes 3 and 13 to the
audited combined financial statements of the Mettler-Toledo Group appearing
elsewhere in this Prospectus (the 'Audited Combined Financial Statements').
7
<PAGE>
The following diagram illustrates the corporate structure of MT Investors
and its subsidiaries upon completion of the Acquisition:
MT Investors Inc.
("MT Investors")
|
|
|
Mettler-Toledo Holding Inc. Issuer of senior guarantee of the Credit
("Holding") Agreement obligations and senior subordinated
| guarantee of the Notes.
|
|
Mettler-Toledo, Inc. Issuer of the Notes, borrower under the
(the "Issuer")(1) Credit Agreement and guarantor of obligations
| of Swiss Subholding under the Credit
| Agreement.
|
U.S. and certain non U.S. Mettler-Toledo Holding AG Borrower under the
Subsidiaries(2) ("Swiss Subholding") Credit Agreement.
|
|
European and certain other
non-U.S. Subsidiaries(2)
- ------------------
(1) Surviving entity of merger with MT Acquisition Corp.
(2) Substantially all of the subsidiaries will be guarantors with respect to the
obligations of Swiss Subholding and/or the Issuer under the Credit
Agreement. See 'Description of Credit Agreement.'
8
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Notes Offered................. $115,000,000 aggregate principal amount of %
Senior Subordinated Notes due 2006.
Note Guarantee................ Holding will fully and unconditionally guarantee
on a senior subordinated basis the performance of
all obligations of the Issuer under the Notes and
the Indenture.
Maturity Date................. , 2006.
Interest Payment Dates........ and of each year, commencing ,
1997.
Optional Redemption........... On and after , 2001, the Notes may be
redeemed, in whole or in part, at the option of
the Issuer at the redemption prices set forth
herein plus accrued and unpaid interest, if any,
to the redemption date. In addition, at any time
on or prior to , 1999 (three years plus
60 days), the Issuer, at its option, may redeem
up to $40 million of the originally issued Notes
with the proceeds of one or more Public Equity
Offerings (as defined), at a cash redemption
price of % of the principal amount thereof,
plus accrued and unpaid interest, if any, to the
redemption date; provided that after giving
effect to any such redemption, at least $75
million of the Notes remains outstanding. See
'Description of Notes-- Optional Redemption.'
Change of Control............. Upon a Change of Control, each holder of Notes
will have the right to require the Issuer to
repurchase in whole or in part such holder's
Notes at a cash purchase price equal to 101% of
the principal amount thereof, plus accrued and
unpaid interest, if any, to the repurchase date.
See 'Description of Notes--Certain Covenants--
Change of Control.'
Ranking....................... The Notes will be unsecured senior subordinated
obligations of the Issuer and, as such, will be
subordinated in right of payment to all existing
and future Senior Indebtedness of the Issuer,
including indebtedness under the Credit
Agreement. The Notes will rank pari passu with
senior subordinated indebtedness, if any, of the
Issuer and will rank senior to subordinated
indebtedness, if any, of the Issuer. In addition,
a substantial majority of the business operations
of the Company are conducted through the
subsidiaries of the Issuer and the Notes will
also be effectively subordinated to all existing
and future liabilities of the Issuer's
subsidiaries. The Holding Note Guarantee will be
an unsecured obligation of Holding and will be
subordinated to all existing and future senior
indebtedness of Holding, including its
obligations under its guarantee in respect of the
Credit Agreement. At June 30, 1996, on a pro
forma basis after giving effect to the
Acquisition and the sale of the Notes and the
application of the estimated net proceeds
therefrom, the aggregate amount of Senior
Indebtedness and indebtedness of the Issuer's
subsidiaries (excluding intercompany
indebtedness) that would have effectively ranked
senior to the Notes would have been approximately
$330.8 million, with a weighted average interest
rate of 7.4%.
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
Restrictive Covenants......... The indenture relating to the Notes (the
'Indenture') will contain certain covenants,
including, but not limited to, covenants with
respect to the following matters: (i) limitation
on indebtedness; (ii) limitation on restricted
payments; (iii) limitation on transactions with
affiliates; (iv) limitation on certain liens; (v)
limitation on certain guarantees, (vi) certain
future note guarantors, (vii) limitation on other
senior subordinated indebtedness; (viii)
limitation on the sale or issuance of preferred
stock of subsidiaries, (ix) limitation on
dividend and other payment restrictions affecting
subsidiaries; (x) limitation on transfer of
assets to certain subsidiaries; (xi) limitation
on disposition of proceeds of certain asset
sales; (xii) change of control; and (xiii)
limitation on merger, consolidation and sale of
assets. See 'Description of Notes--Certain
Covenants' and '--Merger, Consolidation and Sale
of Assets.'
Use of Proceeds............... The net proceeds to the Company from the sale of
the Notes offered hereby are estimated to be
approximately $ million (after deducting
estimated offering expenses and the Underwriters'
discount). The Company will use the net proceeds
of the Offering to provide a portion of the
financing for the Acquisition. See 'Use of
Proceeds,' 'Capitalization' and 'The
Acquisition.'
Absence of a Public Market for
the Notes................... There is no existing trading market for the Notes
and the Company does not intend to apply for
listing of the Notes on any national securities
exchange or for quotation of the Notes on any
automated dealer quotation system. The Company
has been advised by the Underwriters that they
presently intend to make a market in the Notes
after the consummation of the Offering
contemplated hereby, although they are under no
obligation to do so and may discontinue any
market-making activities at any time without any
notice. No assurance can be given as to the price
of the Notes or the liquidity of the trading
market for the Notes or that an active trading
market for the Notes will develop. If an active
trading market for the Notes does not develop,
the market price and liquidity of the Notes may
be adversely affected. If the Notes are traded,
they may trade at a discount from their initial
offering price, depending upon prevailing
interest rates, the market for similar
securities, the performance of the Company and
certain other factors. See 'Underwriting.'
</TABLE>
10
<PAGE>
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
The summary historical financial information for the years ended December
31, 1993, 1994 and 1995 is derived from the Audited Combined Financial
Statements, which have been prepared in accordance with United States generally
accepted accounting principles ('U.S. GAAP'). The summary historical financial
information at June 30, 1996 and for the six months ended June 30, 1995 and 1996
is derived from the unaudited interim combined financial statements of the
Mettler-Toledo Group (the 'Interim Financial Statements'), which, in the opinion
of management, include all adjustments necessary for a fair presentation of the
results for the unaudited periods. Operating results for the six months ended
June 30, 1996 are not necessarily indicative of the results that may be expected
for the year ended December 31, 1996. The summary pro forma income statement and
other information gives effect to the Acquisition as if it had occurred at
January 1, 1995. The summary pro forma balance sheet information at June 30,
1996 gives effect to the Acquisition as if it had occurred at such date. The
summary pro forma financial information does not (i) purport to represent what
the Company's results of operations actually would have been if the Acquisition
had actually occurred as of such date or (ii) give effect to certain
non-recurring charges expected to result from the Acquisition. The
Mettler-Toledo Group's historical net income and cash flows as a wholly owned
operation of Ciba are not necessarily indicative of the net income and cash
flows it might have realized as an independent entity. See 'Unaudited Pro Forma
Financial Information,' 'Management's Discussion and Analysis of Financial
Condition and Results of Operations' and the financial statements and
accompanying notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
-------------------------------- --------------------
1993 1994 1995 1995 1996
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(1):
Net sales......................................... $728,958 $769,136 $850,415 $406,992 $423,802
Cost of sales..................................... 443,534 461,629 508,089 243,643 252,203
-------- -------- -------- -------- --------
Gross profit...................................... 285,424 307,507 342,326 163,349 171,599
Research and development expenses................. 46,438 47,994 54,542 27,005 25,054
Marketing and selling expenses.................... 141,717 152,631 167,396 80,965 81,378
General and administrative expenses............... 68,357 76,248 81,167 37,909 39,153
Amortization of goodwill.......................... 2,535 2,536 2,529 1,289 1,270
Other charges (income), net(2).................... 18,284 (2,852) (701) -- --
-------- -------- -------- -------- --------
Income from operations............................ 8,093 30,950 37,393 16,181 24,744
Interest expense.................................. 15,239 13,307 18,219 8,717 8,346
Financial income, net............................. 4,174 4,864 8,630 2,403 965
Provision for taxes............................... 3,041 8,676 8,782 3,117 6,830
Minority interest................................. 1,140 347 768 270 526
-------- -------- -------- -------- --------
Net income (loss)................................. $ (7,153) $ 13,484 $ 18,254 $ 6,480 $ 10,007
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
OTHER DATA:
EBITDA(3)......................................... $ 57,458 $ 65,068 $ 73,013 $ 31,664 $ 39,103
Net cash provided by operating activities......... 22,456 34,094 51,669 23,066 36,860
Net cash used in investing activities............. (23,857) (12,300) (29,342) (6,202) (9,582)
Net cash provided by (used in) financing
activities...................................... 7,816 (7,496) (49,071) (7,173) (20,429)
Depreciation and amortization expense............. 29,591 34,118 33,363 15,483 14,359
Capital expenditures.............................. 25,122 24,916 25,858 6,527 10,053
Gross margin...................................... 39.2% 40.0% 40.3% 40.1% 40.5%
EBITDA margin..................................... 7.9% 8.5% 8.6% 7.8% 9.2%
Ratio of earnings to fixed charges(4)............. --(5) 2.3x 2.3x 1.9x 2.7x
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30,
FOR THE YEAR ENDED ----------------------------------------
DECEMBER 31, 1995 1995 1996
------------------ ------------------ ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
PRO FORMA FINANCIAL DATA:
Income from operations............................ $ 39,996 $ 17,507 $ 26,051
Interest expense.................................. 38,934 19,467 19,467
Net income (loss)................................. (884) (3,272) 1,758
EBITDA(3)......................................... 79,013 34,664 42,103
Depreciation and amortization expense............. 36,760 17,157 16,052
Gross margin...................................... 40.6% 40.5% 40.8%
EBITDA margin..................................... 9.3% 8.5% 9.9%
Ratio of EBITDA to interest expense............... 2.0x 1.8x 2.2x
Ratio of earnings to fixed charges(4)............. 1.1x(5) --(5) 1.3x
<CAPTION>
FOR THE 12 MONTHS
ENDED JUNE 30,
1996
-----------------
<S> <C>
PRO FORMA FINANCIAL DATA:
Income from operations............................ $48,540
Interest expense.................................. 38,934
Net income (loss)................................. 4,146
EBITDA(3)......................................... 86,452
Depreciation and amortization expense............. 35,655
Gross margin...................................... 40.7%
EBITDA margin..................................... 10.0%
Ratio of EBITDA to interest expense............... 2.2x
Ratio of earnings to fixed charges(4)............. 1.3x
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1996
----------------------
PRO
HISTORICAL FORMA
---------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents......................... $ 45,935 $ 5,000
Net working capital............................... 118,739 136,801
Total assets...................................... 731,920 819,658
Long term third-party debt........................ 6,015 436,229
Net borrowing from Ciba and affiliates(6)......... 182,448 --
Other long-term liabilities(7).................... 88,979 99,479
Stockholder's equity.............................. 193,362(8) 69,600(9)
</TABLE>
- ------------------
(1) Information for the years ended December 31, 1991 and 1992 is not available,
except that net sales for such years were $718,200 and $769,000,
respectively. Approximately 75% of the decrease in net sales in 1993
compared to 1992 resulted from the appreciation of the U.S. dollar against
the Company's other principal trading currencies.
(2) For 1993, consists primarily of costs associated with the closure of a
manufacturing facility in Cologne, Germany, and also includes the
restructuring of certain manufacturing operations and an early retirement
program in the United States. Other income for 1993, 1994 and 1995 relates
primarily to gains from the sale of real property and, in 1994, to a gain on
the sale of an investment. See Note 16 to the Audited Combined Financial
Statements.
(3) 'EBITDA' represents, for any period, the sum of income from operations and
depreciation and amortization expense, excluding restructuring charges of
$19,774 in 1993 and $2,257 in 1995. EBITDA is presented because it is a
widely accepted financial indicator of a company's ability to service and/or
incur indebtedness. Management believes that presentation of EBITDA is
helpful to investors, because EBITDA (subject to certain adjustments) will
be used to determine compliance with certain covenants contained in the
Indenture and the Credit Agreement. However, EBITDA should not be considered
as an alternative to net income as a measure of the Company's operating
results or to cash flows as a measure of liquidity. In addition, although
the EBITDA measure of performance is not recognized under generally accepted
accounting principles, it is widely used by industrial companies as a
general measure of a company's operating performance because it assists in
comparing performance on a relatively consistent basis across companies
without regard to depreciation and amortization, which can vary
significantly depending on accounting methods (particularly where
acquisitions are involved) or non-operating factors such as historical cost
bases. Because EBITDA is not calculated identically by all companies, the
presentation herein may not be comparable to other similarly titled measures
of other companies.
(Footnotes continued on next page)
12
<PAGE>
(Footnotes continued from previous page)
(4) In calculating the ratio of earnings to fixed charges, earnings consist of
income before taxes plus fixed charges. Fixed charges consist of interest
expense and amortization of deferred financing fees, whether capitalized or
expensed, plus one-third of rental expense under operating leases (the
portion that has been deemed by the Company to be representative of an
interest factor).
(5) For the year ended December 31, 1993, earnings were insufficient to cover
fixed charges by approximately $3,000. On a pro forma basis for the six
months ended June 30, 1995, earnings would have been insufficient to cover
fixed charges by approximately $1,667. On a pro forma basis for the year
ended December 31, 1995, if the Senior Indebtedness had had a weighted
interest rate of 8.8% or higher, earnings would have been insufficient to
cover fixed charges.
(6) Includes notes payable and long-term debt payable to Ciba and affiliates
less amounts due from Ciba and affiliates. See Notes 3 and 13 to the Audited
Combined Financial Statements.
(7) Consists primarily of obligations under various pension plans and plans that
provide post-retirement medical benefits. See Note 14 to the Audited
Combined Financial Statements.
(8) Stockholder's equity in the Historical column consists of the combined net
assets of the Mettler-Toledo Group.
(9) Upon consummation of the Acquisition, the Company will record a charge of
$120,400 to reflect the portion of the purchase price allocated to
in-process research and development projects that have economic value. See
'Management's Discussion and Analysis of Financial Condition and Results of
Operations--Effect of Acquisition on Results of Operations.'
13
<PAGE>
RISK FACTORS
In addition to the other information contained in this Prospectus,
prospective investors should consider carefully the following factors before
purchasing the Notes offered hereby. This Prospectus contains forward-looking
statements. These statements are subject to a number of risks and uncertainties,
certain of which are beyond the Company's control. See 'Management's Discussion
and Analysis of Financial Condition and Results of Operations.'
EFFECT OF SUBSTANTIAL INDEBTEDNESS ON OPERATIONS AND LIQUIDITY
In connection with the Acquisition, the Company will incur a significant
amount of indebtedness. At June 30, 1996, the Company's consolidated
indebtedness (excluding unused commitments) would have been approximately $445.8
million and its stockholders' equity would have been approximately $69.6
million, in each case on a pro forma basis after giving effect to the
Acquisition and the sale of the Notes and the application of the net proceeds
therefrom. On a pro forma basis, the Company's ratio of earnings to fixed
charges for the year ended December 31, 1995 and the six months ended June 30,
1996 would have been 1.1x and 1.3x, respectively. The Indenture will permit the
Company to incur or guarantee additional indebtedness, including Senior
Indebtedness under the Credit Agreement and other Senior Indebtedness, subject
to certain limitations. The Company will have additional borrowing capacity on a
revolving credit basis under the Credit Agreement and under local working
capital facilities upon consummation of the Acquisition ($109.2 million on a pro
forma basis at June 30, 1996). The Company will be required to make semiannual
scheduled principal payments on the term loans under the Credit Agreement
commencing in March 1997. See 'Capitalization,' 'Description of Credit
Agreement' and 'Description of Notes.' The Company's ability to comply with the
terms of the Indenture and the Credit Agreement, to make cash payments with
respect to the Notes and under the Credit Agreement and to satisfy its other
debt or to refinance any of such obligations will depend on the future
performance of the Company, which, in turn, is subject to prevailing economic
and competitive conditions and certain financial, business and other factors
beyond its control. See 'Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources,'
'Description of Credit Agreement' and 'Description of Notes.'
The Company's high degree of leverage could have important consequences to
the holders of the Notes, including but not limited to the following: (i) the
Company's ability to obtain additional financing for acquisitions, capital
expenditures, working capital or general corporate purposes may be impaired in
the future; (ii) a substantial portion of the Company's cash flow from
operations must be dedicated to the payment of principal and interest on the
Notes and borrowings under the Credit Agreement and other indebtedness, thereby
reducing the funds available to the Company for its operations and other
purposes, including investments in research and development and capital
spending; (iii) certain of the Company's borrowings are and will continue to be
at variable rates of interest, which exposes the Company to the risk of
increased interest rates; (iv) the indebtedness outstanding under the Credit
Agreement will be secured by all or a portion of the capital stock and assets of
the Issuer, Swiss Subholding and certain of their subsidiaries and will mature
prior to the maturity of the Notes; and (v) the Company may be substantially
more leveraged than certain of its competitors, which may place the Company at a
relative competitive disadvantage and may make the Company more vulnerable to a
downturn in general economic conditions or its business or changing market
conditions and regulations. See 'Description of Credit Agreement' and
'Description of Notes.'
RESTRICTIONS ON OPERATIONS UNDER CREDIT AGREEMENT AND INDENTURE
The Credit Agreement and the Indenture contain a number of covenants that,
among other things, restrict the ability of the Company to incur additional
indebtedness, pay dividends and other distributions, prepay subordinated
indebtedness, dispose of certain assets, enter into sale and leaseback
transactions, create liens, make capital expenditures, issue capital stock and
make certain investments or acquisitions, engage in certain transactions with
affiliates and otherwise restrict corporate activities. In addition, under the
Credit Agreement, the Company will be required to satisfy specified financial
covenants, including the ratio of consolidated EBITDA to consolidated fixed
charges and the ratio of consolidated total debt to consolidated EBITDA. Certain
of these financial tests may be more restrictive in future years. See
'Description of Credit Agreement' and 'Description of Notes.'
The Company's ability to comply with the covenants and restrictions
contained in the Credit Agreement and the Indenture may be affected by events
beyond its control, including prevailing economic, financial and industry
conditions. A failure to comply with the covenants and restrictions contained in
the Credit Agreement, the Indenture or any agreements with respect to any
additional financing could result in an event of default under such agreements
which could permit acceleration of the related debt and acceleration of debt
under other debt
14
<PAGE>
agreements that may contain cross-acceleration or cross-default provisions, and
the commitments of the lenders to make further extensions under the Credit
Agreement could be terminated. If the Company were unable to repay its
indebtedness to the lenders under the Credit Agreement, such lenders could
proceed against the collateral securing such indebtedness as described under
'Description of Credit Agreement.'
RISK OF FUTURE LOSSES
On a pro forma basis assuming the Acquisition had occurred on January 1,
1995, the Company would have had a net loss of $0.9 million for the year ended
December 31, 1995 and net income of $1.8 million for the six months ended June
30, 1996. These pro forma results are affected by increased interest expense,
goodwill amortization and depreciation expense in connection with the
Acquisition. These pro forma results do not reflect a charge (currently
estimated to be $120.4 million) for in-process research and development that
will be recorded upon consummation of the Acquisition and a charge (currently
estimated to be $21.1 million) relating to the revaluation of inventory that
will be recorded over the period in which the inventories are sold, which is
expected to be one to two quarters following the Closing. As a result of these
charges, the Company anticipates that it will report a net loss for the period
in which the Acquisition occurs and possibly for the period thereafter. There
can be no assurance that the Company will not incur net losses in subsequent
periods. In the quarter ending September 30, 1996, the Mettler-Toledo Group will
record a charge of $2.0 million to reflect the costs associated with the closure
of its Westerville, Ohio facility. See 'Unaudited Pro Forma Financial
Information' and 'Management's Discussion and Analysis of Financial Condition
and Results of Operations--Effect of Acquisition on Results of Operations.'
SUBORDINATION OF NOTES AND HOLDING NOTE GUARANTEE
The Notes will be unsecured, senior subordinated obligations of the Issuer
and, as such, will be subordinated in right of payment to all existing and
future Senior Indebtedness of the Issuer, including indebtedness of the Issuer
under the Credit Agreement and the guarantee by the Issuer of the indebtedness
of Swiss Subholding under the Credit Agreement. The Notes will rank pari passu
with all senior subordinated indebtedness, if any, of the Issuer and will rank
senior to all subordinated indebtedness, if any, of the Issuer. The Notes will
also be effectively subordinated to all secured indebtedness of the Company to
the extent of the value of the assets securing such indebtedness, and to all
existing and future liabilities of the Issuer's subsidiaries, including the
liabilities of Swiss Subholding under the Credit Agreement. At June 30, 1996, on
a pro forma basis after giving effect to the Acquisition and the sale of the
Notes and the application of the estimated net proceeds therefrom, the aggregate
amount of Senior Indebtedness of the Issuer and indebtedness of the Issuer's
subsidiaries (excluding intercompany indebtedness) that would have effectively
ranked senior to the Notes would have been approximately $330.8 million, with a
weighted average interest rate of 7.4%. No other senior subordinated or
subordinated indebtedness of the Issuer or the Issuer's subsidiaries is
outstanding. In addition, on such pro forma basis, under the Indenture, the
Issuer and Swiss Subholding would have been permitted to borrow $84.2 million of
additional Senior Indebtedness under the revolving credit facility under the
Credit Agreement and, provided certain tests are met, will be able to borrow
additional Senior Indebtedness. In the event of a bankruptcy, liquidation or
reorganization of the Issuer or in the event that any default in payment of, or
the acceleration of, any debt occurs, holders of Senior Indebtedness will be
entitled to payment in full from the proceeds of all assets of the Issuer prior
to any payment of such proceeds to holders of the Notes. In addition, the Issuer
may not make any principal or interest payments in respect of the Notes if any
payment default exists with respect to Senior Indebtedness and the maturity of
such indebtedness is accelerated, or in certain circumstances prior to such
acceleration for a specified period of time, unless, in any case, such default
has been cured or waived, any such acceleration has been rescinded or such
indebtedness has been repaid in full. Consequently, there can be no assurance
that the Issuer will have sufficient funds remaining after such payments to make
payments to the holders of the Notes. See 'Description of Notes--Ranking;
Subordination.'
Payments in respect of the Holding Note Guarantee will be subordinated to
the prior payment in full of all existing and future senior indebtedness of
Holding, including all of its obligations under its guarantee in respect of the
Credit Agreement. As of June 30, 1996, on a pro forma basis after giving effect
to the anticipated borrowings under the Credit Agreement and the issuance of the
Holding Note Guarantee, the aggregate amount of such senior indebtedness would
have been approximately $330.8 million. In the event of a bankruptcy,
liquidation, dissolution, reorganization or similar proceedings with respect to
Holding, its assets will be available to pay obligations under the Notes only
after such senior indebtedness has been paid in full, and there can be no
assurance that there will be sufficient assets to pay amounts due in respect of
the Holding Note Guarantee.
15
<PAGE>
UNSECURED STATUS OF NOTES; ENCUMBRANCE OF ASSETS TO SECURE SENIOR INDEBTEDNESS
The Notes will not be secured by any of the Company's assets. The
obligations of the Issuer under the Credit Agreement (including the guarantee of
the obligations of Swiss Subholding) are secured by a first priority security
interest in 65% of the capital stock of Swiss Subholding and certain other
non-U.S. subsidiaries of the Issuer and all other material assets of the Issuer
and its U.S. subsidiaries. The obligations of Swiss Subholding under the Credit
Agreement are secured, to the extent permitted by applicable law, by all the
material assets of Swiss Subholding and its subsidiaries. The Company under the
Indenture is permitted to incur additional secured indebtedness. If the Issuer
becomes insolvent or is liquidated, or if payment under the Credit Agreement or
such additional secured indebtedness is accelerated, the lenders under the
Credit Agreement and such additional secured indebtedness would be entitled to
exercise the remedies available to a secured lender under applicable law and
pursuant to instruments governing such indebtedness. Accordingly, such lenders
will have a prior claim on such of the Company's assets. In any such event,
because the Notes will not be secured by any of the Company's assets, it is
possible that there would be no assets remaining from which claims of the
holders of the Notes could be satisfied or, if any such assets remained, such
assets might be insufficient to satisfy such claims fully. The Holding Note
Guarantee is also unsecured. See 'Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources,'
'Description of Credit Agreement' and 'Description of Notes.'
DEPENDENCE ON EARNINGS OF SUBSIDIARIES; LACK OF SUBSIDIARY GUARANTEES; NO
INDEPENDENT OPERATIONS OF HOLDING
A substantial majority of the Company's assets are held by subsidiaries of
the Issuer. As a result, the Issuer's rights, and the rights of its creditors,
including the holders of the Notes, to participate in the distribution of assets
of any subsidiary upon such subsidiary's liquidation or reorganization will be
subject to the prior claims of such subsidiary's creditors, except to the extent
that the Issuer is itself recognized as a creditor of such subsidiary, in which
case the claims of the Issuer would still be subject to the claims of any
secured creditor of such subsidiary and of any holder of indebtedness of such
subsidiary senior to that held by the Issuer. Claims against Swiss Subholding
under the Credit Agreement would be senior to any claims by the Issuer as a
creditor of Swiss Subholding.
The Notes are primary obligations of the Issuer and are not currently
expected to be guaranteed by any of the Issuer's subsidiaries. A substantial
majority of the operations of the Company are currently conducted through the
subsidiaries of the Issuer. The cash flow and the consequent ability to service
debt of the Issuer, including the Notes, are dependent in significant part upon
the Issuer's ability to receive cash from its subsidiaries. The payment of
dividends and the making of loans and advances to the Issuer by its subsidiaries
may be subject to statutory and contractual restrictions, are contingent upon
the earnings of those subsidiaries and are subject to various business
considerations. Dividends and other payments to the Issuer from subsidiaries in
certain jurisdictions are subject to legal restrictions and may have adverse tax
consequences to the Issuer or such subsidiaries. In addition, all of the
Issuer's U.S. subsidiaries have guaranteed the obligations of the Issuer under
the Credit Agreement (including its guarantee of Swiss Subholding's obligations)
and all of the subsidiaries of Swiss Subholding have, to the extent permitted by
applicable law, guaranteed the obligations of Swiss Subholding under the Credit
Agreement.
Holding is a holding company with no independent operations and no assets
other than the capital stock of the Issuer. Holding, therefore, will be
dependent upon the receipt of dividends or other distributions from the Issuer
to fund any obligations that it incurs, including obligations under the Holding
Note Guarantee. The Indenture will not, however, permit distributions from the
Issuer to Holding, other than for certain specified purposes as described under
'Description of Notes--Certain Covenants--Limitation on Restricted Payments.'
The Credit Agreement will contain similar or more restrictive provisions.
Accordingly, if the Issuer should at any time be unable to pay interest or
premium, if any, on or principal of the Notes, it is unlikely that the Issuer
will be able to distribute the funds necessary to enable Holding to meet its
obligations under the Holding Note Guarantee.
RISK OF INABILITY TO FINANCE CHANGE OF CONTROL OFFER
Upon the occurrence of a Change of Control, the Issuer will be required to
make an offer to purchase all of the outstanding Notes at a price equal to 101%
of the principal amount thereof at the date of purchase plus accrued and unpaid
interest, if any, to the date of purchase. The occurrence of certain of the
events that would constitute a Change of Control would constitute a default
under the Credit Agreement and might constitute a default under other
indebtedness of the Company. In addition, the Credit Agreement will prohibit the
purchase of the Notes by the Issuer in the event of a Change in Control, unless
and until such time as the indebtedness under
16
<PAGE>
the Credit Agreement is repaid in full. The Issuer's failure to purchase the
Notes in such instance would result in a default under each of the Indenture and
the Credit Agreement. The inability to repay the indebtedness under the Credit
Agreement, if accelerated, could have materially adverse consequences to the
Issuer and to the holders of the Notes. In the event of a Change of Control,
there can be no assurance that the Issuer would have sufficient assets to
satisfy all of its obligations under the Credit Agreement and the Notes. Future
Senior Indebtedness of the Issuer may also contain prohibitions of certain
events or transactions which could constitute a Change of Control or require
such Senior Indebtedness to be repurchased upon a Change of Control. See
'Description of Credit Agreement' and 'Description of Notes--Change of Control.'
RISK OF CURRENCY FLUCTUATIONS
Swiss franc-denominated expenses represent a much greater percentage of the
Company's operating expenses than Swiss franc-denominated sales represent of
total net sales. Some of the Company's manufacturing costs in Switzerland relate
to products that are sold outside of Switzerland, including many technologically
sophisticated products requiring highly skilled personnel. Moreover, a
substantial percentage of the Company's research and development expenses and
general and administrative expenses are incurred in Switzerland. In 1995, the
Company incurred approximately 29% of its expenses included in income from
operations in Swiss francs but received only 5% of its total net sales in Swiss
francs. As a result, appreciation of the Swiss franc against the U.S. dollar or
the Company's other major trading currencies, including the principal European
currencies, has a negative impact on the Company's income from operations, and
depreciation of the Swiss franc has a positive impact. From 1993 to 1995, the
Swiss franc appreciated 20% against the U.S. dollar and 8% against the German
mark (based on the average exchange rate for 1993 and the average exchange rate
for 1995). From the first six months of 1995 to the first six months of 1996,
the Swiss franc depreciated 1.5% against the U.S. dollar and appreciated 2.3%
against the German mark (based on the average exchange rate for each such
period). Further appreciation of the Swiss franc could have a material adverse
effect on the Company's results of operations. See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations-- Effect of Currency
on Results of Operations.' For a discussion of the impact of changes in currency
exchange rates on the Company's liquidity, see 'Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources.'
The Company's operations are conducted by subsidiaries in many countries,
and the results of operations and the financial position of each of those
subsidiaries is reported in the relevant foreign currency and then translated
into U.S. dollars at the applicable foreign currency exchange rate for inclusion
in the Company's consolidated financial statements. As exchange rates between
these foreign currencies and the U.S. dollar fluctuate, the translation effect
of such fluctuations may have a material adverse effect on the Company's results
of operations or financial position as reported in U.S. dollars. However, the
effect of these changes on income from operations generally offsets in part the
effect on income from operations of changes in the exchange rate between the
Swiss franc and other currencies described in the preceding paragraph.
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
The Company does business in numerous countries, including emerging markets
in Asia and Latin America. In addition to currency risks discussed above, the
Company's international operations are subject to the risk of new and different
legal and regulatory requirements in local jurisdictions, tariffs and trade
barriers, potential difficulties in staffing and managing local operations,
credit risk of local customers and distributors, potential difficulties in
protecting intellectual property, risk of nationalization of private
enterprises, potential imposition of restrictions on investments, potentially
adverse tax consequences, including imposition or increase of withholding and
other taxes on remittances and other payments by subsidiaries, and local
economic, political and social conditions, including the possibility of
hyper-inflationary conditions, in certain countries. The Company plans to
increase its presence in Latin American countries and China. As a result,
inflationary conditions in these countries could have an increasingly
significant effect on the Company's operating results.
The conversion into foreign currency of funds earned in local currency
through the Company's operations in the People's Republic of China and the
repatriation of such funds require certain governmental approvals. Failure to
obtain such approvals could result in the Company being unable to convert or
repatriate earnings from its Chinese operations, which may become an
increasingly important part of the Company's international operations.
COMPETITION; IMPROVEMENTS IN TECHNOLOGY
The markets in which the Company operates are highly competitive. Weighing
markets are fragmented both geographically and by application, particularly the
industrial and food retailing market. As a result, the Company competes with
numerous regional or specialized competitors, many of which are well-established
in their
17
<PAGE>
markets. Some competitors are divisions of larger companies with potentially
greater financial and other resources than the Company. The Company has, from
time to time, experienced price pressures from competitors in certain product
lines and geographic markets.
The Company's competitors can be expected to continue to improve the design
and performance of their products and to introduce new products with competitive
price and performance characteristics. Although the Company believes that it has
certain technological and other advantages over its competitors, realizing and
maintaining these advantages will require continued investment by the Company in
research and development, sales and marketing and customer service and support.
There can be no assurance that the Company will have sufficient resources to
continue to make such investments or that the Company will be successful in
maintaining such advantages.
SIGNIFICANT SALES TO PHARMACEUTICAL AND CHEMICAL INDUSTRIES
The Company's products are used extensively in the pharmaceutical and
chemical industries. Consolidation in these industries has had an adverse impact
on the Company's sales in recent years. A prolonged downturn or any additional
consolidation in these industries could adversely affect the Company's operating
results.
NO PRIOR OPERATIONS AS AN INDEPENDENT COMPANY
Prior to the Acquisition, the business of the Company has been operated as
a group of indirect wholly owned subsidiaries of Ciba. Management of the Company
has extensive experience in operating the Company's business as an autonomous
group within Ciba, but has not operated the Company's business as a stand-alone
entity. In addition, following consummation of the Acquisition, the Company will
no longer benefit from certain credit support and limited operational support
that has in the past been provided by Ciba. Under the terms of the Acquisition
Agreement (as defined), Ciba will not provide any transitional services to the
Company after consummation of the Acquisition. See 'The Acquisition.' The
Company believes that it will incur additional expenses following the Closing of
approximately $2.3 million per year, including an annual management fee of $1
million to be paid to AEA Investors. See 'Unaudited Pro Forma Financial
Information.'
CONTROLLING STOCKHOLDERS; BENEFITS TO AEA INVESTORS
As a result of their beneficial ownership of the Company, AEA Investors and
certain of its investor-shareholders and/or certain members of its management
will have the ability to exercise control over the business and affairs of the
Company by virtue of their continuing ability to elect a majority of the Board
of Directors of MT Investors.
In connection with the Acquisition, the Company will pay AEA Investors a
transaction fee of $5.5 million and reimburse AEA Investors for certain related
expenses. Following the Acquisition, AEA Investors and the Company will be party
to an agreement pursuant to which AEA Investors will provide management,
consulting and financial services to the Company. In consideration for such
services, AEA Investors will be entitled to an annual fee in the amount of $1
million, plus reimbursement for certain expenses and indemnification against
certain liabilities. See 'Certain Relationships and Related Transactions.'
RELIANCE ON KEY MANAGEMENT
Although it is anticipated that all of the key management employees will
have employment contracts with the Company or its affiliates and that after
consummation of the Acquisition various members of management will own a portion
of the shares of nonvoting capital stock of MT Investors and will have options
to purchase additional shares of such nonvoting capital stock, there is no
assurance that such individuals will remain with the Company. If, for any
reason, such key personnel do not continue to be active in the Company's
management, operations could be adversely affected. The Company has no key man
life insurance policies with respect to any of its senior executives.
ENVIRONMENTAL MATTERS
The Company is subject to various environmental laws and regulations in the
jurisdictions in which it operates, including those relating to air emissions,
wastewater discharges, the handling and disposal of solid and hazardous wastes
and the remediation of contamination associated with the use and disposal of
hazardous substances. The Company, like many of its competitors, has incurred,
and will continue to incur, capital and operating expenditures and other costs
in complying with such laws and regulations in both the United States and
abroad. The Company is currently involved in, or has potential liability with
respect to, the remediation of past contamination in certain of its presently
and formerly owned and leased facilities in both the United States and abroad.
In addition, certain of the Company's present and former facilities have or had
been in operation for many decades and, over such time, some of these facilities
may have used substances or generated and disposed
18
<PAGE>
of wastes which are or may be considered hazardous. It is possible that such
sites, as well as disposal sites owned by third parties to which the Company has
sent wastes, may in the future be identified and become the subject of
remediation. Accordingly, although the Company believes that it is in
substantial compliance with applicable environmental requirements, it is
possible that the Company could become subject to additional environmental
liabilities in the future that could result in a material adverse effect on the
Company's results of operations or financial condition. See
'Business--Environmental Matters.'
REGULATORY APPROVALS
The Acquisition is subject to approval by antitrust regulatory authorities
in Belgium and Austria, and by authorities governing foreign investment in
Australia. All such approvals are expected to be received prior to Closing. The
transfer of the Company's subsidiaries and its joint venture in China from AGP
to Swiss Subholding in connection with the Acquisition requires approval by
Chinese governmental authorities. The Company believes that such approval will
be obtained in due course but may not be obtained by Closing. If not so
obtained, the parties to the Acquisition Agreement have agreed therein to
negotiate to provide arrangements economically and commercially equivalent to
the transfer.
RISK OF FRAUDULENT TRANSFER LIABILITY
Management of the Company believes that the indebtedness represented by the
Notes is being incurred for proper purposes and in good faith, and that, based
on present forecasts, asset valuations and other financial information, the
Company is and, after the consummation of the Acquisition, will be, solvent,
will have sufficient capital for carrying on its business and will be able to
pay its debts as they mature. Notwithstanding management's belief, if a court of
competent jurisdiction in a suit by an unpaid creditor or a representative of
creditors (such as a trustee in bankruptcy or a debtor-in-possession) were to
find that the Company did not receive fair consideration or reasonably
equivalent value for incurring the Notes or any debt being refinanced thereby
and, at the time of the incurrence of the Notes or such indebtedness, the
Company was insolvent, was rendered insolvent by reason of such incurrence, was
engaged in a business or transaction for which its remaining assets constituted
unreasonably small capital, intended to incur, or believed that it would incur,
debts beyond its ability to pay as such debts matured, or intended to hinder,
delay or defraud its creditors, such court could avoid such indebtedness. A
likely consequence of such avoidance would be the subordination of the
indebtedness represented by the Notes to existing and possibly future
indebtedness of the Company. The measure of insolvency for purposes of the
foregoing will vary depending upon the law of the relevant jurisdiction.
Generally, however, a company would be considered insolvent for purposes of the
foregoing if the sum of the company's debts is greater than all the company's
property at a fair valuation, or if the present fair salable value of the
company's assets is less than the amount that will be required to pay its
probable liability on its existing debts as they become absolute and matured.
There can be no assurance as to what standards a court would apply to determine
whether the Issuer was solvent at the relevant time, or whether, whatever
standard was applied, the Notes would not be avoided on another of the grounds
set forth above.
ABSENCE OF A PUBLIC MARKET FOR THE NOTES; POSSIBLE VOLATILITY
There is no established trading market for the Notes and the Company does
not intend to apply for listing of the Notes on any national securities exchange
or for quotation of the Notes on any automated dealer quotation system. The
Company has been advised by the Underwriters that they presently intend to make
a market in the Notes after the consummation of the Offering contemplated
hereby, although they are under no obligation to do so and may discontinue any
market-making activities at any time without any notice. Accordingly, no
assurance can be given as to the price of the Notes or the liquidity of the
trading market for the Notes or that an active public trading market for the
Notes will develop. If an active public trading market for the Notes does not
develop, the market price and liquidity of the Notes may be adversely affected.
If the Notes are traded, they may trade at a discount from their initial
offering price, depending upon prevailing interest rates, the market for similar
securities, the performance of the Company and certain other factors. The
liquidity of, and trading markets for, the Notes may also be adversely affected
by general declines in the market for non-investment grade debt. Such declines
may adversely affect the liquidity of, and trading markets for, the Notes,
independent of the financial performance of or prospects for the Company.
Historically, the market for debt similar to the Notes has been subject to
disruptions that have caused substantial price volatility. There can be no
assurance that the market for the Notes will not be subject to similar
disruptions. Any such disruptions may have a material adverse effect on the
value of the Notes.
19
<PAGE>
THE ACQUISITION
The following is a summary of the structure of the Acquisition and certain
provisions of the Stock Purchase Agreement dated as of April 2, 1996, as amended
(the 'Acquisition Agreement'), among AGP, Ciba and AEA MT Inc. (to be renamed MT
Investors), which has been filed as an exhibit to the registration statement of
which this Prospectus is a part, and which sets forth the terms and conditions
for the Company's purchase of the Mettler-Toledo Group from AGP. This summary
does not purport to be complete and is qualified in its entirety by reference to
the Acquisition Agreement.
STRUCTURE OF THE ACQUISITION
The Acquisition of the Mettler-Toledo Group will be accomplished through
the purchase of all of the outstanding capital stock of Mettler-Toledo, Inc. and
Swiss Subholding, which, together with their respective subsidiaries, will
constitute the entire Mettler-Toledo Group. At the Closing: (i) $190.0 million
will be contributed to MT Investors, the parent company of Holding, by AEA
Investors, its senior management and its investor-shareholders, the management
and certain employees of the Mettler-Toledo Group and Ciba (which will purchase
a 5% interest); (ii) MT Investors will contribute such funds to Holding, which
will in turn contribute such funds to MT Acquisition Corp.; (iii) MT Acquisition
Corp. will borrow $135.0 million of term loans under the Credit Agreement and
will complete the Offering of the Notes, and Holding will guarantee the Notes;
(iv) MT Acquisition Corp. will purchase the stock of Mettler-Toledo, Inc. and
Swiss Subholding from AGP; (v) Swiss Subholding will borrow $195.8 million under
the Credit Agreement, including $140.0 million of term loans and $55.8 million
under a revolving credit facility; (vi) Mettler-Toledo, Inc. and Swiss
Subholding will repay intercompany indebtedness to AGP and its affiliates (which
aggregated $182.4 million at June 30, 1996); and (vii) MT Acquisition Corp. will
be merged with and into Mettler-Toledo, Inc. As a result of these transactions,
Mettler-Toledo, Inc. will succeed to MT Acquisition Corp.'s obligations under
the Notes and the Credit Agreement and will be the primary obligor of the Notes.
Mettler-Toledo, Inc. will be a wholly owned subsidiary of Holding, and Swiss
Subholding will be a wholly owned subsidiary of Mettler-Toledo, Inc. Following
the Acquisition $109.2 million will be available for additional borrowings under
the revolving credit facility under the Credit Agreement and under local working
capital facilities. Management and certain employees of the Company are expected
to own at least 16.5% of the equity of MT Investors on a fully diluted basis,
including their investments in common stock of MT Investors and options to
purchase additional shares of such common stock to be granted in connection with
the Acquisition. Actual amounts at Closing will vary due to changes in currency
exchange rates and changes in certain balance sheet items subsequent to June 30,
1996.
ACQUISITION AGREEMENT TERMS
As consideration for the Acquisition, the Company will pay to AGP SFr 512.4
million (which has been fixed at no more than $421.7 million due to the purchase
of a currency option) in cash in Swiss francs. This amount includes SFr 403.0
million of purchase price and SFr 109.4 million of pre-Closing dividends to AGP.
In addition, the Company will repay all net intercompany indebtedness owed by
the Mettler-Toledo Group to Ciba or any of Ciba's other affiliates as of the
Closing ($182.4 million as of June 30, 1996).
The Acquisition Agreement contains representations and warranties with
respect to the condition and operations of the Mettler-Toledo Group, covenants
with respect to conduct of the Mettler-Toledo Group's operations prior to the
Closing and certain closing conditions, including the continued accuracy of
representations and warranties. The Closing is conditioned on receipt of certain
regulatory approvals. No representations and warranties survive the Closing.
Thus, the Company will have no contractual recourse to Ciba for pre-Closing
liabilities of the Mettler-Toledo Group, except, under certain circumstances,
for certain pre-Closing tax matters. MT Investors will assign all of its rights
under the Acquisition Agreement to Mettler-Toledo, Inc.
The Company has agreed that it will not, in the 18-month period following
the Closing, without the prior written consent of Ciba, engage in certain
extraordinary dispositions, including certain sales of assets or equity of any
company in the Mettler-Toledo Group, mergers or similar business combinations
(excepting certain transactions within the Company and transactions the
aggregate net proceeds of which do not exceed SFr 80.0 million ($64.0 million as
of June 30, 1996) in a 12-month period).
The transfer of the Company's subsidiaries and its joint venture in China
from AGP to Swiss Subholding in connection with the Acquisition requires
approval by Chinese governmental authorities, which approval the Company
believes will be obtained in due course, but may not be obtained by Closing.
These entities own two of the Company's 14 manufacturing facilities. See
'Business--Properties.' If such consent is not so obtained, the parties to the
Acquisition Agreement have agreed therein to negotiate to provide arrangements
economically and commercially equivalent to the transfer. See 'Risk
Factors--Regulatory Approvals.'
Neither Ciba nor AGP will provide transitional services to the Company
following the Closing.
20
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Notes, after deducting expenses of
the Offering, including discounts to the Underwriters, are estimated to be
approximately $ million. The Company will use the net proceeds, together
with borrowings under the Credit Agreement, equity contributions to the Company
and cash on hand in the Mettler-Toledo Group, to finance the Acquisition and pay
related fees and expenses. See 'The Acquisition.'
The following table sets forth the estimated sources and uses of funds for
the Acquisition as if the Closing had occurred on June 30, 1996. (Actual amounts
at Closing will vary due to changes in currency exchange rates and changes in
certain balance sheet items subsequent to June 30, 1996.)
<TABLE>
<CAPTION>
AMOUNT
(IN THOUSANDS)
<S> <C>
SOURCES OF FUNDS:
Credit Agreement:
Term loans(1)........................................ $ 275,000
Revolving credit facility(2)(3)(4)(5)................ 55,829
Gross proceeds of the Notes............................ 115,000
Equity contribution(3)................................. 190,000
Cash on hand to be applied in the Acquistion(3)(4)..... 40,935
--------------
Total Sources..................................... $ 676,764
--------------
--------------
USES OF FUNDS:
Acquisition price(5)................................... $ 421,691
Repayment of net indebtedness to Ciba and
affiliates(4)(6)(7)................................... 182,448
Repayment of bank and other loans(4)(7)................ 38,625
Fees and expenses...................................... 34,000
--------------
Total Uses........................................ $ 676,764
--------------
--------------
</TABLE>
- ------------------
(1) Will consist of (i) $100,000 of Term A Loans to be denominated in various
currencies; (ii) $75,000 of Term B Loans to be denominated in U.S. dollars;
(iii) $80,000 of Term C Loans to be denominated in U.S. dollars; and (iv)
$20,000 of Term D Loans to be denominated in U.S. dollars. See 'Description
of Credit Agreement.'
(2) To be denominated in various currencies. See 'Description of Credit
Agreement.'
(3) Up to $7,500 of an aggregate $15,000 to be contributed by certain of the
Company's employees to MT Investors may be contributed after Closing. If
less than $7,500 is so contributed by the Company's employees by December
31, 1996, the balance will be contributed by AEA Investors and/or its
investor-shareholders. At Closing, cash on hand or additional borrowings
under the revolving credit facility under the Credit Agreement will be used
pending receipt of the proceeds from any deferred equity contributions. Ciba
will contribute $9,500 (5%) of the total $190,000 of equity contributions.
(4) Amounts at June 30, 1996. Actual amounts at Closing will vary.
(5) Acquisition price consists of $331,650 of purchase price and $90,041 of
pre-Closing dividends to AGP. In connection with such dividends, certain
members of the Mettler-Toledo Group will be subject to Swiss withholding
taxes in the amount of SFr 37,850, which amount will be fully refunded
following Closing. The amount of such withholding taxes will be funded
pending receipt of such refund through borrowings under the revolving credit
facility. Such temporary borrowings are not reflected in the table.
(6) Net of intercompany indebtedness due from Ciba and affiliates, payable at
Closing in Swiss francs.
(7) For information regarding interest rates, maturities and other principal
terms of the indebtedness being repaid at Closing, see Notes 3 and 13 to the
Audited Combined Financial Statements.
21
<PAGE>
CAPITALIZATION
The following table sets forth the actual combined short-term debt and
capitalization of the Mettler-Toledo Group at June 30, 1996 and the pro forma
short-term debt and capitalization of the Company on such date after giving
effect to the Acquisition and the issuance of the Notes offered hereby and the
application by the Company of the estimated net proceeds therefrom. See 'Use of
Proceeds,' 'Unaudited Pro Forma Financial Information' and 'Selected Historical
Financial Information.'
<TABLE>
<CAPTION>
JUNE 30, 1996
-----------------------
HISTORICAL PRO FORMA
---------- ---------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt, including current maturities of
long-term debt:
Bank and other loans............................... $ 32,610 $ --
Notes payable to Ciba and affiliates............... 83,242 --
Short-term portion of term loans under Credit
Agreement....................................... -- 9,600
---------- ---------
Total short-term debt........................... $ 115,852 $ 9,600
---------- ---------
---------- ---------
Long-term debt:
Payable to Ciba and affiliates..................... $ 152,231 $ --
Due to third parties............................... 6,015 --
Term loans under Credit Agreement.................. -- 265,400
Revolving credit facility under Credit
Agreement(1).................................... -- 55,829
Notes offered hereby............................... -- 115,000
---------- ---------
Total long-term debt............................ 158,246 436,229
Stockholders' equity:
Net assets......................................... 193,362 --
Common stock(2).................................... -- 190,000
Accumulated deficit(3)............................. -- (120,400 )
---------- ---------
Total stockholders' equity...................... 193,362 69,600
---------- ---------
Total capitalization.......................... $ 351,608 $505,829
---------- ---------
---------- ---------
</TABLE>
- ------------------
(1) At June 30, 1996 on a pro forma basis after giving effect to the
Acquisition, the Issuer, Swiss Subholding and other subsidiaries of the
Company would have been able to borrow an additional $109,171 under the
revolving credit facility under the Credit Agreement and local working
capital facilities. Of this amount, SFr 37,850 will be drawn under the
revolving credit facility temporarily to fund certain withholding taxes
payable in connection with the Acquisition, which withholding taxes will be
fully refunded following Closing. Such borrowings are not reflected in the
table.
(2) Up to $7,500 of an aggregate $15,000 to be contributed by certain of the
Company's employees to MT Investors may be contributed after Closing. If
less than $7,500 is so contributed by the Company's employees by December
31, 1996, the balance will be contributed by AEA Investors and/or its
investor-shareholders. At Closing, cash on hand or additional borrowings
under the revolving credit facility under the Credit Agreement will be used
pending receipt of the proceeds from any deferred equity contributions. Ciba
will contribute $9,500 (5%) of the total $190,000 of equity contributions.
(3) In accordance with U.S. GAAP, the Company will allocate a portion of the
purchase price to in-process research and development projects that have
economic value and, since U.S. GAAP does not permit the capitalization of
research and development, immediately charge this value (currently estimated
to approximate $120,400) to operations upon consummation of the Acquisition.
22
<PAGE>
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial statements of the Company have
been prepared to give effect to the Acquisition, including the Offering. The
accompanying Unaudited Pro Forma Balance Sheet at June 30, 1996 has been
prepared as if the Acquisition was consummated as of that date. The accompanying
Unaudited Pro Forma Statements of Operations of the Company for the year ended
December 31, 1995 and the six months ended June 30, 1995 and 1996 give effect to
the Acquisition as if it occurred at January 1, 1995.
The pro forma adjustments are based upon available information and certain
assumptions that the Company believes are reasonable under the circumstances.
Pro forma adjustments are applied to the historical financial statements of the
Mettler-Toledo Group to account for the Acquisition under the purchase method of
accounting. Under purchase accounting, the estimated Acquisition cost will be
allocated to the Mettler-Toledo Group's assets and liabilities based on their
relative fair values. Allocations are subject to valuations as of the date of
the Acquisition based on appraisals and other studies which are not yet
completed. Accordingly, the final allocations may differ from the amounts
reflected herein.
The Company is evaluating its business strategy as an independent company
after the Acquisition and believes that it can support continued sales growth
while further reducing its overall cost base. In July 1996, in anticipation of
the consummation of the Acquisition, the Company announced the closure of its
Westerville, Ohio facility. In addition, the Company will implement a targeted
workforce reduction by the end of 1996. The Unaudited Pro Forma Statements of
Operations reflect a pro forma adjustment of $8.3 million per year reflecting
the cost savings the Company expects to realize from these projects. See Note
(A) to the Unaudited Pro Forma Statements of Operations. A reserve of $9.0
million is reflected on the Unaudited Pro Forma Balance Sheet to reflect the
estimated costs of implementing these projects. See Note 2(F) to the Unaudited
Pro Forma Balance Sheet. Of such reserve of $9.0 million, the costs associated
with the closure of the Westerville facility of $2.0 million will be recorded as
a charge in the quarter ended September 30, 1996.
In accordance with U.S. GAAP, the Company will allocate a portion of the
estimated Acquisition cost to (i) in-process research and development projects
that have economic value (currently estimated to be $120.4 million) and (ii) the
revaluation of inventories (currently estimated to be $21.1 million). In the
case of in-process research and development, the amount allocated will be
charged to expense as of the date of the Acquisition. In the case of
inventories, the revaluation amount will be charged to cost of sales over the
period in which such inventories are sold, which is expected to be one to two
quarters following the Closing. These one-time charges have not been reflected
in the accompanying Unaudited Pro Forma Statements of Operations due to their
unusual, non-recurring nature.
The pro forma financial statements have been prepared based upon the
Audited Combined Financial Statements and the Interim Financial Statements of
the Mettler-Toledo Group, included elsewhere herein, which have been prepared in
accordance with U.S. GAAP. The pro forma financial statements should be read in
conjunction with the Audited Combined Financial Statements, the Interim
Financial Statements, 'Management's Discussion and Analysis of Financial
Condition and Results of Operations' and other financial information included
elsewhere in this Prospectus. These unaudited pro forma financial statements and
related notes are provided for informational purposes only and do not purport to
be indicative of the results which would have actually been obtained had the
Acquisition and other events been completed on the dates indicated or which may
be expected to occur in the future. The Mettler-Toledo Group's historical net
income and cash flows as a wholly owned operation of Ciba are not necessarily
indicative of the net income and cash flows it might have realized as an
independent entity. See 'Management's Discussion and Analysis of Financial
Condition and Results of Operations--Effect of Acquisition on Results of
Operations.'
23
<PAGE>
METTLER-TOLEDO, INC.
UNAUDITED PRO FORMA BALANCE SHEET
<TABLE>
<CAPTION>
AS OF JUNE 30, 1996
------------------------------------------------------
METTLER-TOLEDO
METTLER-TOLEDO PRO FORMA INC.
GROUP HISTORICAL ADJUSTMENTS PRO FORMA
---------------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................... $ 45,935 $(40,935)(1) $ 5,000
Due from Ciba and affiliates................... 53,025 (53,025)(2)(A) --
Trade accounts receivable, net................. 157,212 157,212
Inventories.................................... 107,342 21,100(2)(B) 128,442
Deferred taxes................................. 5,836 5,836
Other current assets........................... 25,040 25,040
---------------- -------------- --------------
Total current assets........................ 394,390 (72,860) 321,530
Property, plant and equipment, net............... 225,885 52,500(2)(C) 278,385
Goodwill and other intangible assets, net........ 83,155 94,635(2)(D) 177,790
Long-term deferred taxes......................... 13,596 13,596
Debt issuance costs.............................. -- 13,463(2)(E) 13,463
Other assets..................................... 14,894 14,894
---------------- -------------- --------------
Total assets................................ $731,920 $ 87,738 $819,658
---------------- -------------- --------------
---------------- -------------- --------------
LIABILITIES AND STOCKHOLDER'S EQUITY/NET ASSETS
Current liabilities:
Trade accounts payable......................... $ 34,265 $ 34,265
Accrued and other liabilities.................. 101,782 $ 9,000(2)(F) 110,782
Taxes payable.................................. 16,439 16,439
Deferred taxes................................. 7,313 6,330(2)(G) 13,643
Bank and other loans........................... 32,610 (32,610)(2)(H) --
Notes payable to Ciba and affiliates........... 83,242 (83,242)(2)(A) --
Short-term portion of term loans............... -- 9,600(1) 9,600
---------------- -------------- --------------
Total current liabilities................... 275,651 (90,922) 184,729
Long-term debt payable to Ciba and affiliates.... 152,231 (152,231)(2)(A) --
Long-term debt due to third parties.............. 6,015 (6,015)(2)(H) --
Long-term deferred taxes......................... 12,827 13,939(2)(G) 26,766
Credit Agreement:
Term loans..................................... -- 265,400(1) 265,400
Revolving credit facility...................... -- 55,829(1) 55,829
Notes............................................ -- 115,000(1) 115,000
Other long-term liabilities...................... 88,979 10,500(2)(I) 99,479
---------------- -------------- --------------
Total liabilities........................... 535,703 211,500 747,203
Minority interest................................ 2,855 2,855
Stockholder's equity/net assets:
Net assets..................................... 193,362 (193,362)(2) --
Common stock................................... -- 190,000(1) 190,000
Accumulated deficit............................ -- (120,400)(2)(J) (120,400)
---------------- -------------- --------------
Total stockholder's equity/net assets....... 193,362 (123,762) 69,600
---------------- -------------- --------------
Total liabilities and stockholder's
equity/net assets......................... $731,920 $ 87,738 $819,658
---------------- -------------- --------------
---------------- -------------- --------------
</TABLE>
24
<PAGE>
METTLER-TOLEDO, INC.
NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
JUNE 30, 1996
(IN THOUSANDS)
(1) For a description of the sources and uses of funds for the Acquisition, see
'Use of Proceeds.' The amount of all debt due to Ciba and affiliates, net of
amounts due from Ciba and affiliates, will be settled at Closing. The Company
also expects to repay all existing bank and other loans at Closing. The
Unaudited Pro Forma Balance Sheet assumes receipt at Closing of the $7,500
equity contribution that may be made after Closing, as described under 'Use of
Proceeds.'
(2) Under purchase accounting, the total estimated Acquisition cost will be
allocated to the Company's assets and liabilities based on their relative fair
values. Allocations are subject to valuations as of the date of the Acquisition
based on appraisals and other studies which are not yet completed. Accordingly,
the final allocations may be different from the amounts reflected herein. The
amount and the components of the estimated Acquisition cost, along with the
estimate of the allocation of the purchase price to assets acquired and
liabilities assumed is as follows:
<TABLE>
<S> <C>
Estimated Acquisition price, including debt...................... $ 642,764
Acquisition and financing costs.................................. 34,000
----------
Total estimated Acquisition price, including debt........... $ 676,764
----------
----------
Historical net book value at June 30, 1996....................... $ 193,362
Repayment of net amounts owed to Ciba and affiliates:
Due from Ciba and affiliates................................... (53,025)(A)
Notes payable to Ciba and affiliates........................... 83,242(A)
Long-term debt payable to Ciba and affiliates.................. 152,231(A)
Estimated revaluation of inventories............................. 21,100(B)
Estimated revaluation of property, plant and equipment........... 52,500(C)
Goodwill and other intangible assets, net........................ 94,635(D)
Capitalized debt issuance related expenses....................... 13,463(E)
Estimated restructuring reserve.................................. (9,000)(F)
Net deferred tax effects of certain of the purchase accounting
adjustments:
Current..................................................... (6,330)(G)
Long-term................................................... (13,939)(G)
Repayment of bank and other loans................................ 32,610(H)
Long-term debt due to third parties.............................. 6,015(H)
Record pension and post-retirement obligations at projected
benefit obligation
and accumulated benefit obligation, respectively............... (10,500)(I)
Estimated in-process research and development valuation.......... 120,400(J)
----------
$ 676,764
----------
----------
</TABLE>
(A) As indicated in Note 1 above, the net amount of all debt due to Ciba
and affiliates will be settled at Closing.
(B) The Company will revalue certain inventories in connection with the
purchase price allocation. This revaluation will be charged to cost of sales in
the period in which the inventories are sold, which is expected to be one to two
quarters after Closing. This one-time charge is reflected in the Unaudited Pro
Forma Balance Sheet but not in the accompanying Unaudited Pro Forma Statements
of Operations due to its unusual, non-recurring nature.
(C) Represents the estimated revaluation of acquired real estate,
principally land holdings in Switzerland contiguous to certain of the Company's
manufacturing facilities.
25
<PAGE>
(D) Represents the excess purchase price resulting from the Acquisition,
which includes value that will ultimately be attributed to patents and other
intangible assets, other acquired assets, and goodwill once the Company's asset
appraisals and other valuation studies are completed. Such asset appraisals and
valuation studies are anticipated to be completed shortly after completion of
the Acquisition. As such asset appraisals and valuation studies have not yet
been completed, for purposes of the accompanying pro forma presentation, the
excess purchase price has been included in Goodwill and other intangible assets,
net in the Unaudited Pro Forma Balance Sheet and is being amortized over an
estimated composite amortizable life of 30 years in the Unaudited Pro Forma
Statements of Operations. The Company presently estimates that upon completion
of the asset appraisals and valuation studies, approximately $20 million of such
excess purchase price may be allocated to patents and amortized over a useful
life of five years and approximately $40 million may be allocated to trademarks
and amortized over a useful life of 12 to 13 years, while the remaining
approximately $118 million would represent goodwill and be amortized over a
useful life of 40 years. Final allocation of the excess purchase price between
intangible assets and goodwill will have no material effect on the Company's
balance sheet but may affect the estimated composite amortizable life of such
intangible assets and goodwill and, accordingly, the amount of amortization
expense.
(E) Represents expenses relating to the issuance of the loans under the
Credit Agreement and the issuance of the Notes.
(F) Represents a reserve for costs associated with the closure of the
Company's Westerville, Ohio facility, which was announced in July 1996, and a
targeted workforce reduction to be implemented by the end of 1996.
(G) Represents the net deferred tax liability (both current and long-term)
relating to certain of the purchase price adjustments for which there will be no
change in underlying tax bases of the affected assets and liabilities.
(H) At Closing, the Company expects to repay all existing bank and other
loans and long-term debt to third parties.
(I) Represents the recording of the pension liability at the projected
benefit obligation, net of plan assets (funded status) level and the
post-retirement liability at the accumulated benefit obligation level.
(J) In accordance with U.S. GAAP, the Company will allocate a portion of
the purchase price to in-process research and development projects that have
economic value and immediately write-off this value as a charge to operations
upon consummation of the Acquisition. This one-time charge is reflected in the
Unaudited Pro Forma Balance Sheet but not in the Unaudited Pro Forma Statements
of Operations due to its unusual, non-recurring nature.
26
<PAGE>
METTLER-TOLEDO, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
-------------------------------------------------------
METTLER-TOLEDO,
METTLER-TOLEDO PRO FORMA INC.
GROUP HISTORICAL ADJUSTMENTS PRO FORMA
---------------- -------------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net sales.......................... $850,415 $ 850,415
Cost of sales...................... 508,089 $ (2,600)(A) 505,489
---------------- -------------- ---------------
Gross profit..................... 342,326 2,600 344,926
Research and development
expenses......................... 54,542 (1,200)(A) 53,342
Marketing and selling expenses..... 167,396 (2,500)(A) 164,896
General and administrative
expenses......................... 81,167 2,300(B) 81,467
(2,000)(A)
Amortization of goodwill and other
intangible assets................ 2,529 3,397(C) 5,926
Other charges (income), net........ (701) (701)
---------------- -------------- ---------------
Income from operations........... 37,393 2,603 39,996
Interest expense................... 18,219 18,381(D) 38,934
2,334(E)
Financial income, net.............. 8,630 (5,388)(F) 3,242
---------------- -------------- ---------------
Income before taxes and minority
interest...................... 27,804 (23,500) 4,304
Provision for taxes................ 8,782 (4,362)(G) 4,420
Minority interest.................. 768 768
---------------- -------------- ---------------
Net income (loss).................. $ 18,254 $(19,138) $ (884)
---------------- -------------- ---------------
---------------- -------------- ---------------
</TABLE>
See accompanying notes to Unaudited Pro Forma Statements of Operations.
27
<PAGE>
METTLER-TOLEDO, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1995
-----------------------------------------------------
METTLER-TOLEDO,
METTLER-TOLEDO PRO FORMA INC.
GROUP HISTORICAL ADJUSTMENTS PRO FORMA
---------------- -------------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net sales..................... $406,992 $ 406,992
Cost of sales................. 243,643 $ (1,300)(A) 242,343
---------------- -------------- ---------------
Gross profit................ 163,349 1,300 164,649
Research and development
expenses.................... 27,005 (600)(A) 26,405
Marketing and selling
expenses.................... 80,965 (1,250)(A) 79,715
General and administrative
expenses.................... 37,909 1,150(B) 38,059
Amortization of goodwill and (1,000)(A)
other intangible assets..... 1,289 1,674(C) 2,963
---------------- -------------- ---------------
Income from operations...... 16,181 1,326 17,507
Interest expense.............. 8,717 9,583(D) 19,467
1,167(E)
Financial income, net......... 2,403 (2,110)(F) 293
---------------- -------------- ---------------
Income (loss) before taxes
and minority interest.... 9,867 (11,534) (1,667)
Provision (benefit) for
taxes....................... 3,117 (1,782)(G) 1,335
Minority interest............. 270 270
---------------- -------------- ---------------
Net income (loss)............. $ 6,480 $ (9,752) $ (3,272)
---------------- -------------- ---------------
---------------- -------------- ---------------
</TABLE>
See accompanying notes to Unaudited Pro Forma Statements of Operations.
28
<PAGE>
METTLER-TOLEDO, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1996
-----------------------------------------------------
METTLER-TOLEDO,
METTLER-TOLEDO PRO FORMA INC.
GROUP HISTORICAL ADJUSTMENTS PRO FORMA
---------------- -------------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net sales..................... $423,802 $ 423,802
Cost of sales................. 252,203 $ (1,300)(A) 250,903
---------------- -------------- ---------------
Gross profit................ 171,599 1,300 172,899
Research and development
expenses.................... 25,054 (600)(A) 24,454
Marketing and selling
expenses.................... 81,378 (1,250)(A) 80,128
General and administrative
expenses.................... 39,153 1,150(B) 39,303
Amortization of goodwill and (1,000)(A)
other intangible assets..... 1,270 1,693(C) 2,963
---------------- -------------- ---------------
Income from operations...... 24,744 1,307 26,051
Interest expense.............. 8,346 9,954(D) 19,467
1,167(E)
Financial income (expense),
net......................... 965 (1,813)(F) (848)
---------------- -------------- ---------------
Income before taxes and
minority interest........ 17,363 (11,627) 5,736
Provision for taxes........... 6,830 (3,378)(G) 3,452
Minority interest............. 526 526
---------------- -------------- ---------------
Net income.................... $ 10,007 $ (8,249) $ 1,758
---------------- -------------- ---------------
---------------- -------------- ---------------
</TABLE>
See accompanying notes to Unaudited Pro Forma Statements of Operations.
29
<PAGE>
METTLER-TOLEDO, INC.
NOTES TO UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
PERIODS ENDED DECEMBER 31, 1995 AND JUNE 30, 1995 AND 1996
(IN THOUSANDS)
(A) Represents the cost savings the Company expects to realize from (i) its
targeted workforce reduction program that is expected to be completed by the end
of 1996 and (ii) the closure of the Company's Westerville, Ohio facility, which
was announced in July 1996. The Company believes it can achieve such cost
savings, which result principally from elimination of (i) the Westerville
facility's fixed manufacturing costs and (ii) the affected employees' salaries
and benefits, without otherwise affecting its cost base or impairing its sales
as a result of available manufacturing capacity in its other facilities.
(B) Reflects the estimated additional general and administrative expenses
the Company anticipates it will incur principally as a result of the Acquisition
and its changed legal, tax and financing structure. These costs include
additional administrative, treasury, internal audit and certain legal services
and an annual management fee of $1,000 to be paid to AEA Investors for
consulting and financial services to be provided to the Company.
(C) Represents the amortization of goodwill and other intangible assets
arising from the Acquisition over their useful lives (five years for
approximately $20 million allocated to patents, 12 to 13 years for approximately
$40 million allocated to trademarks and 40 years for approximately $118 million
of goodwill). See Note (D) to the Unaudited Pro Forma Balance Sheet.
(D) Reflects the net change in interest expense based on the Acquisition
financing:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
YEAR ENDED ------------------
DECEMBER 31, 1995 1995 1996
----------------- ------- -------
<S> <C> <C> <C>
Elimination of historical interest
expense on
refinanced debt.................. $ (18,219) $(8,717) $(8,346)
Interest on revolving credit
facility......................... 3,350 1,675 1,675
Interest on term loans............. 21,175 10,587 10,587
Interest on Notes.................. 12,075 6,038 6,038
----------------- ------- -------
Net change....................... $ 18,381 $ 9,583 $ 9,954
----------------- ------- -------
----------------- ------- -------
</TABLE>
For each 0.25% change in the assumed average rate on the revolving credit
facility and term loans under the Credit Agreement and the Notes, interest
expense would change by approximately $1,115 for the year ended December 31,
1995 and $557 for the six months ended June 30, 1995 and 1996.
(E) Represents the amortization of debt issuance fees plus other fees to be
incurred in connection with the Credit Agreement. The amortization periods for
the fees related to the term loans under the Credit Agreement and the Notes are
approximately seven years and ten years, respectively.
(F) Represents elimination of historical interest income.
(G) Estimated income tax effects of pre-tax pro forma adjustments and
related financing structure. The increased pro forma tax rate is principally
attributable to increased non-deductible goodwill expense.
30
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION
Set forth below is selected historical financial information of the
Mettler-Toledo Group as of the dates and for the periods shown. The selected
historical financial information at December 31, 1994 and 1995 and for the years
ended December 31, 1993, 1994, and 1995 is derived from the Audited Combined
Financial Statements that were audited by KPMG Fides Peat, independent auditors,
whose report appears elsewhere in this Prospectus. The selected historical
financial information at June 30, 1996 and for the six months ended June 30,
1995 and 1996 is derived from the Interim Financial Statements, which are
unaudited. In the opinion of management such unaudited information includes all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation of the information included therein. Operating results for the six
months ended June 30, 1996 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1996. The selected historical
financial information should be read in conjunction with 'Management's
Discussion and Analysis of Financial Condition and Results of Operations,' the
Audited Combined Financial Statements and the Interim Financial Statements. The
Audited Combined Financial Statements and the Interim Financial Statements from
which the selected consolidated financial information set forth below have been
derived were prepared in accordance with U.S. GAAP.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
-------------------------------- --------------------
1993 1994 1995 1995 1996
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(1):
Net sales............................. $728,958 $769,136 $850,415 $406,992 $423,802
Cost of sales......................... 443,534 461,629 508,089 243,643 252,203
-------- -------- -------- -------- --------
Gross profit.......................... 285,424 307,507 342,326 163,349 171,599
Research and development expenses..... 46,438 47,994 54,542 27,005 25,054
Marketing and selling expenses........ 141,717 152,631 167,396 80,965 81,378
General and administrative expenses... 68,357 76,248 81,167 37,909 39,153
Amortization of goodwill.............. 2,535 2,536 2,529 1,289 1,270
Other charges (income), net(2)........ 18,284 (2,852) (701) -- --
-------- -------- -------- -------- --------
Income from operations................ 8,093 30,950 37,393 16,181 24,744
Interest expense...................... 15,239 13,307 18,219 8,717 8,346
Financial income, net................. 4,174 4,864 8,630 2,403 965
Provision for taxes................... 3,041 8,676 8,782 3,117 6,830
Minority interest..................... 1,140 347 768 270 526
-------- -------- -------- -------- --------
Net income (loss)..................... $ (7,153) $ 13,484 $ 18,254 $ 6,480 $ 10,007
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
BALANCE SHEET DATA(1):
Cash and cash equivalents............. $ 63,802 $ 41,402 $ 45,935
Net working capital................... 126,065 90,740 118,739
Total assets.......................... 683,198 724,094 731,920
Long-term third party debt............ 862 3,621 6,015
Net borrowing from Ciba and
affiliates(3)...................... 177,651 203,157 182,448
Other long-term liabilities(4)........ 83,964 84,303 88,979
Stockholder's equity(5)............... 228,194 193,254 193,362
OTHER DATA:
EBITDA(6)............................. $ 57,458 $ 65,068 $ 73,013 $ 31,664 $ 39,103
Net cash provided by operating
activities......................... 22,456 34,094 51,669 23,066 36,860
Net cash used in investing
activities......................... (23,857) (12,300) (29,342) (6,202) (9,582)
Net cash provided by (used in)
financing activities............... 7,816 (7,496) (49,071) (7,173) (20,429)
Depreciation and amortization
expense............................ 29,591 34,118 33,363 15,483 14,359
Capital expenditures.................. 25,122 24,916 25,858 6,527 10,053
Gross margin.......................... 39.2% 40.0% 40.3% 40.1% 40.5%
EBITDA margin......................... 7.9% 8.5% 8.6% 7.8% 9.2%
Ratio of earnings to fixed
charges(7)......................... --(8) 2.3x 2.3x 1.9x 2.7x
</TABLE>
(Footnotes on next page)
31
<PAGE>
- ------------------
(1) Balance sheet information at December 31, 1991, 1992 and 1993 is not
available. Income statement information for the years ended December 31,
1991 and 1992 is not available, except that net sales for such years were
$718,200 and $769,000. Approximately 75% of the decrease in net sales in
1993 compared to 1992 resulted from the appreciation of the U.S. dollar
against the Company's other principal trading currencies.
(2) For 1993, consists primarily of costs associated with the closure of a
manufacturing facility in Cologne, Germany, and also includes the
restructuring of certain manufacturing operations and an early retirement
program in the United States. Other income for 1993, 1994 and 1995 relates
primarily to gains from the sale of real property and, in 1994, to a gain on
the sale of an investment. See Note 16 to the Audited Combined Financial
Statements.
(3) Includes notes payable and long-term debt payable to Ciba and affiliates
less amounts due from Ciba and affiliates. See Notes 3 and 13 to the Audited
Combined Financial Statements.
(4) Consists primarily of obligations under various pension plans and plans that
provide post-retirement medical benefits. See Note 14 to the Audited
Combined Financial Statements.
(5) Stockholder's equity consists of the combined net assets of the
Mettler-Toledo Group.
(6) 'EBITDA' represents, for any period, the sum of income from operations and
depreciation and amortization expense, excluding restructuring charges of
$19,774 in 1993 and $2,257 in 1995. EBITDA is presented because it is a
widely accepted financial indication of a company's ability to service
and/or incur indebtedness. Management believes that presentation of EBITDA
is helpful to investors, because EBITDA (subject to certain adjustments)
will be used to determine compliance with certain covenants contained in the
Indenture and the Credit Agreement. However, EBITDA should not be considered
as an alternative to net income as a measure of the Company's operating
results or to cash flows as a measure of liquidity. In addition, although
the EBITDA measure of performance is not recognized under generally accepted
accounting principles, it is widely used by industrial companies as a
general measure of a company's operating performance because it assists in
comparing performance on a relatively consistent basis across companies
without regard to depreciation and amortization, which can vary
significantly depending on accounting methods (particularly where
acquisitions are involved) or non-operating factors such as historical cost
bases. Because EBITDA is not calculated identically by all companies, the
presentation herein may not be comparable to other similarly titled measures
of other companies.
(7) In calculating the ratio of earnings to fixed charges, earnings consist of
income before taxes plus fixed charges. Fixed charges consist of interest
expense and amortization of deferred financing fees, whether capitalized or
expensed, plus one-third of rental expense under operating leases (the
portion that has been deemed by the Company to be representative of an
interest factor).
(8) For the year ended December 31, 1993, earnings were insufficient to cover
fixed charges by approximately $3,000.
32
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company's financial condition
and results of operations should be read in conjunction with the Audited
Combined Financial Statements and the Interim Financial Statements included
elsewhere in this Prospectus.
GENERAL
The Company's results of operations reflect the combined operations of the
Mettler-Toledo Group of companies owned by Ciba which are being acquired in the
Acquisition. Financial information is presented in accordance with U.S. GAAP.
The Company operates a global business, with net sales that are widely
diversified by geographic region and by product line. The Company has achieved
its market leadership position through its continued investment in product
development, the maintenance and, in some instances, expansion, of its existing
market position in established markets and its aggressive pursuit of new
markets. The Company believes that this strategy has enabled it to increase
sales at a rate in excess of the overall market growth rate. Net sales have
increased across all major product lines in laboratory, industrial and food
retailing markets. The Company's net sales increased 4% in the first six months
of 1996, 11% in 1995 and 6% in 1994, in each case over the relevant prior
period. In local currency, net sales increased 5% in the first six months of
1996 and 5% in both 1995 and 1994. In addition to the Company's growth strategy
in its established markets, the Company has pursued an aggressive growth
strategy in emerging markets, where demand for more sophisticated weighing
products has increased as economies industrialize. The Company has made
investments to establish a distribution and manufacturing infrastructure in
certain emerging markets, particularly in Asia. Net sales in Asia (excluding
Japan) and Latin America in local currency increased 19% in the first six months
of 1996 and 20% in 1995, in each case over the relevant prior period.
During the periods presented, the Company has succeeded in increasing its
gross margins and operating margins through productivity improvements and
cost-cutting initiatives. These increases were achieved despite the appreciation
of the Swiss franc against the Company's other principal trading currencies,
which has the effect of increasing overall costs due to the Company's
significant operations in Switzerland, and despite the Company's continued
investments in product development and in its distribution and manufacturing
infrastructure. Gross margins improved from 39.2% in 1993 to 40.5% in the first
six months of 1996. Operating margins excluding the 1993 restructuring charge of
$19.8 million improved from 3.8% in 1993 to 5.8% in the first six months of 1996
(8.1% at 1993 currency exchange rates). During this period, the Company took
steps to increase workforce flexibility, reduce its overall workforce and shift
the mix of its workforce toward higher growth and lower cost regions. For
example, the Company closed a plant in Cologne, Germany in mid-1994 and is
constructing a new manufacturing facility in Shanghai, China, which is expected
to be completed by the end of 1996. The Company also focuses on product
innovations that can reduce manufacturing costs, such as the Brickstone
technology, which has just begun to have a favorable effect on manufacturing
costs as the technology is incorporated throughout the Company's product lines.
The Company is currently implementing two projects which are aimed at reducing
warehouse capacity, improving inventory turnover and reducing materials handling
costs. In addition to continuing these cost-cutting efforts, the Company is also
evaluating its business strategy as an independent company after the Acquisition
and believes that it can support continued sales growth while further reducing
its overall cost base. In July 1996, in anticipation of the consummation of the
Acquisition, the Company announced the closure of its Westerville, Ohio
facility. In addition, the Company will implement a targeted workforce reduction
by the end of 1996. The Company expects that these two additional projects will
result in annual cost reductions of $8.3 million.
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<PAGE>
EFFECT OF CURRENCY ON RESULTS OF OPERATIONS
Swiss franc-denominated expenses represent a much greater percentage of the
Company's total expenses than Swiss franc-denominated sales represent of total
sales. Most of the Company's manufacturing costs in Switzerland relate to
products sold outside of Switzerland, including many technologically
sophisticated products requiring highly skilled personnel. Moreover, a
substantial percentage of the Company's overall research and development
expenses and general and administrative expenses are incurred in Switzerland. In
1995, the Company incurred approximately 29% of its expenses included in income
from operations in Swiss francs but received only 5% of its net sales in Swiss
francs. As a result, appreciation of the Swiss franc against the U.S. dollar and
the Company's other major trading currencies, especially the principal European
currencies, has a negative impact on the Company's operating results, and
depreciation of the Swiss franc against the U.S. dollar and such other
currencies has a positive impact. From 1993 to 1995, the Swiss franc appreciated
20% against the U.S. dollar and 8% against the German mark (based on the average
exchange rate for 1993 and the average exchange rate for 1995). From the first
six months of 1995 to the first six months of 1996, the Swiss franc depreciated
1.5% against the U.S. dollar and appreciated 2.3% against the German mark (based
on the average exchange rate for each such period). If the prior year's currency
exchange rates had remained in effect, income from operations would have been
$10.0 million higher in 1995 and $8.2 million higher in 1994. For information
regarding the Company's currency hedging activities, see '--Financial
Instruments with Off-Balance Sheet Risks.'
Approximately 69% of net sales in 1995 were made in currencies other than
the U.S. dollar, which is the Company's reporting currency. The U.S. dollar
value of net sales, gross profit and income from operations in other currencies
can vary significantly with changes in exchange rates between these other
currencies and the U.S. dollar. The effect of these changes on income from
operations generally offsets in part the effect on income from operations of
changes in the exchange rate between the Swiss franc and other currencies
described in the preceding paragraph.
EFFECT OF ACQUISITION ON RESULTS OF OPERATIONS
Upon consummation of the Acquisition, the Company will, in accordance with
U.S. GAAP relating to purchase accounting rules, adjust to fair value the
Company's assets and liabilities which, on a pro forma basis, would have
resulted in increased amortization estimated to be $3.4 million for 1995 and
$1.7 million for the first six months of 1996. In addition, as part of the
Acquisition, the Company will incur additional debt, which would have resulted
in a net increase in interest expense, including amortization of debt issuance
costs and other fees, in the amount of $20.6 million in 1995 and $11.1 million
for the first six months of 1996, on a pro forma basis. The Company estimates
that it will incur approximately $2.3 million annually in additional general and
administrative expenses as a result of being an independent company, including
an annual management fee of $1 million to be paid to AEA Investors. The
Acquisition would have resulted in a decrease in the Company's provision for
income taxes of $4.3 million in 1995 and $3.4 million for the first six months
of 1996 on a pro forma basis. As a result of the above adjustments, on a pro
forma basis the Company would have reported net loss of $0.9 million in 1995, as
compared to its historical net income of $18.3 million and net income of $1.8
million for the first six months of 1996, as compared to its historical net
income of $10.0 million. See 'Unaudited Pro Forma Financial Information.'
In addition, in accordance with U.S. GAAP, the Company will allocate a
portion of the purchase price to in-process research and development projects
that have economic value and to inventories. Approximately $120.4 million will
be allocated to in-process research and development and will be charged to
expense in the quarter in which the Acquisition occurs. Approximately $21.1
million will be allocated to the revaluation of inventories and will be charged
to cost of sales over the period in which the inventories are sold, which is
expected to be one to two quarters following the Closing. These charges are not
reflected in the Unaudited Pro Forma Statements of Income due to their unusual,
non-recurring nature. In addition, in the quarter ending September 30, 1996 the
Company will record a charge of $2.0 million to reflect the costs associated
with the closing of its Westerville, Ohio facility. See 'Unaudited Pro Forma
Financial Information.'
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RESULTS OF OPERATIONS
The following table sets forth certain items in the combined statements of
operations as a percentage of net sales for the years 1993, 1994 and 1995 and
for the six months ended June 30, 1995 and 1996.
<TABLE>
<CAPTION>
PERCENTAGE OF NET SALES
-----------------------------------------
SIX MONTHS
YEARS ENDED DECEMBER ENDED
31, JUNE 30,
----------------------- --------------
1993 1994 1995 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales............................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales........................... 60.8 60.0 59.7 59.9 59.5
----- ----- ----- ----- -----
Gross profit............................ 39.2 40.0 40.3 40.1 40.5
Research and development expenses(1).... 6.4 6.3 6.4 6.6 5.9
Marketing and selling expenses.......... 19.4 19.8 19.7 19.9 19.2
General and administrative expenses..... 9.4 10.0 9.6 9.3 9.3
Amortization of goodwill................ 0.4 0.3 0.3 0.3 0.3
Other charges (income), net............. 2.5 (0.4) (0.1) -- --
----- ----- ----- ----- -----
Income from operations.................. 1.1% 4.0% 4.4% 4.0% 5.8%
----- ----- ----- ----- -----
----- ----- ----- ----- -----
</TABLE>
- ------------------
(1) Total research and development expenses were 7.2% of net sales in 1993, 7.2%
in 1994, 7.3% in 1995, 7.8% for the six months ended June 30, 1995 and 6.9%
for the six months ended June 30, 1996, including costs associated with
customer-specific engineering projects, which are included in cost of sales
for financial reporting purposes.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
Net sales were $423.8 million for the six months ended June 30, 1996
compared to $407.0 million for the corresponding period in the prior year, an
increase of 4%. Net sales in local currency increased 5%, reflecting market
share growth in selected geographic markets and strong sales of laboratory
products, while sales of industrial and food retailing products were only
slightly higher. Net sales in Europe in local currency increased 5%, with
southern Europe contributing significantly to the increase. Net sales in the
Americas in local currency increased 3% as a result of increased sales of
laboratory products. Net sales in Asia and other markets in local currency
increased 14% as a result of continued economic growth and further penetration
in selected markets. Results in Japan and China were particularly strong.
Gross profit as a percentage of net sales increased to 40.5% for the six
months ended June 30, 1996 compared to 40.1% for the corresponding period in the
prior year. The improvement resulted in part from increased sales of higher
margin products, offset in part by higher raw materials costs.
Marketing and selling expenses, research and development expenses and
general and administrative expenses all decreased as a percentage of net sales,
as a result of increased sales and the Company's continuing efforts to control
costs. Income from operations was $24.7 million for the six months ended June
30, 1996, compared to $16.2 million for the corresponding period in the prior
year. Changes in currency exchange rates had a minimal effect on income from
operations.
Interest expense decreased slightly to $8.3 million for the six months
ended June 30, 1996 compared to $8.7 million for the corresponding period in the
prior year. Interest expense following the Acquisition will be materially
different. See '--Effect of Acquisition on Results of Operations,' '--Liquidity
and Capital Resources' and 'Unaudited Pro Forma Financial Information.' Net
financial income decreased to $1.0 million for the six months ended June 30,
1996 compared to $2.4 million for the six months ended June 30, 1995,
principally as a result of losses on foreign currency transactions.
Net income increased to $10.0 million for the six months ended June 30,
1996 compared to $6.5 million for the corresponding period in the prior year.
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<PAGE>
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
Net sales were $850.4 million in 1995 compared to $769.1 million in 1994,
an increase of 11%. Net sales in local currency increased 5%; the remaining 6%
of the increase resulted from changes in currency exchange rates. In 1994 the
Company discontinued certain items in its systems and laboratory measurement
instruments product lines. Excluding the effect of these discontinued items, net
sales in local currency would have increased 6%. Sales growth in local currency
reflected steady growth across all major product lines in laboratory, industrial
and food retailing markets as result of favorable economic conditions and market
share gains in selected geographic markets. Sales were helped by the expansion
of the Company's line of titrators and the introduction of a family of standard
industrial programmable terminals for weighing instruments.
Net sales in Europe in local currency increased 7% in 1995 over 1994,
consistent with the continuing recovery from the 1993 recession and market share
gains in selected regions and product lines. Southern Europe contributed
significantly to the increase. Net sales in the Americas in local currency
decreased 1% in 1995 from 1994. Results in the Americas reflect reduced demand
in the United States for laboratory instruments in the wake of consolidation in
the pharmaceutical and chemical industries and unusually high demand for retail
equipment in 1994 as a result of a new labeling law that caused food retailers
to buy additional retail weighing and labeling equipment. Net sales in Asia and
other markets in local currency increased 20% in 1995 over 1994, primarily as a
result of continued economic growth and the Company's increased market share in
selected markets. Sales were also helped by the recovery in China from the poor
market conditions of 1994. See '--Year Ended December 31, 1994 Compared to Year
Ended December 31, 1993.'
Gross profit as a percentage of net sales increased slightly to 40.3% in
1995 from 40.0% in 1994. These results were achieved despite the appreciation of
the Swiss franc against the Company's other principal trading currencies, which
has the effect of increasing overall manufacturing costs due to the Company's
significant manufacturing operations in Switzerland. Improved manufacturing
productivity contributed to the increase, including the favorable effects of the
Company's mid-1994 closure of its Cologne, Germany plant, partially offset by
higher raw materials costs.
Marketing and selling expenses, research and development expenses and
general and administrative expenses were all relatively constant as a percentage
of net sales. Cost increases resulting from the currency effect of the
significant appreciation of the Swiss franc against the Company's other major
trading currencies were offset by the Company's cost control efforts, as
described under '--General.' Income from operations was $37.4 million in 1995
compared to $30.9 million in 1994. If 1994 currency exchange rates had remained
in effect throughout 1995, income from operations in 1995 would have been $47.4
million.
Interest expense rose to $18.2 million in 1995 from $13.3 million in 1994,
an increase of 37%, principally due to higher interest rates from the conversion
of a loan from Ciba from short term to long term. Interest expense following the
Acquisition will be materially different. See '--Effect of Acquisition on
Results of Operations,' '--Liquidity and Capital Resources' and 'Unaudited Pro
Forma Financial Information.' Net financial income increased to $8.6 million in
1995 from $4.9 million in 1994. The higher level of financial income resulted
principally from increased gain on foreign currency transactions.
Net income increased to $18.3 million in 1995 from $13.5 million in 1994.
YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993
Net sales were $769.1 million in 1994 compared to $729.0 million in 1993,
an increase of 6%. Net sales in local currency increased 5%, and net sales in
local currency, excluding the effect of the discontinued items described above,
increased 7%. The Company achieved steady growth across all major product lines
in laboratory, industrial and food retailing markets. Sales growth reflected
favorable economic conditions in Europe and the Americas and market share gains
in selected regions and product lines. Sales were helped by the expansion of the
Company's line of titrators and the introduction of a new food retailing network
scale.
Net sales in Europe in local currency increased 5% in 1994 over 1993, due
principally to the beginning of the recovery from the 1993 recession and market
share gains in selected regions and product lines. Net sales in the Americas in
local currency increased 5%. Results in the Americas reflect unusually high
demand for retail equipment, due to a new labeling law that went into effect in
1994 and caused food retailers to buy additional retail weighing and labeling
equipment, and improved market conditions generally, partially offset by
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<PAGE>
consolidation in the pharmaceutical and chemical industries. Net sales in Asia
and other markets in local currency increased 3% in 1994 over 1993 as a result
of strong sales increases in most regions, offset in large part by poor market
conditions in China caused by the introduction of a new value-added tax, high
inflation and a liquidity squeeze of both cash and credit.
Gross profit as a percentage of net sales improved to 40.0% in 1994
compared to 39.2% in 1993, despite the appreciation of the Swiss franc against
the Company's other principal trading currencies. The improvement was attained
through cost reductions, including the favorable effects of the Company's
mid-1994 closure of its Cologne, Germany plant, as well as improved
manufacturing productivity.
General and administrative expenses increased as a percentage of net sales,
principally as a result of the appreciation of the Swiss franc against the
Company's other principal trading currencies, partially offset by cost control
efforts, as described under '--General.' Marketing and selling expenses and
research and development expenses were relatively constant as a percentage of
net sales, despite the appreciation of the Swiss franc against the Company's
other principal trading currencies. This was achieved primarily as a result of
the Company's efforts to control costs. Income from operations was $30.9 million
in 1994 compared to $8.1 million in 1993. If 1993 currency exchange rates had
remained in effect throughout 1994, income from operations in 1994 would have
been $39.1 million.
In 1993, the Company incurred net other charges of $18.3 million,
principally relating to the closure of a factory in Cologne, Germany, the
restructuring of certain producing organizations and an early retirement program
in the United States. The closure of the Cologne facility represented the
largest portion and included expenses for significant staff reductions, asset
write-offs and expenses related to the closure of the site.
Interest expense declined to $13.3 million in 1994 from $15.2 million in
1993, a decrease of 13%, principally as a result of lower interest rates.
Interest expense following the Acquisition will be materially different. See
'--Effect of Acquisition on Results of Operations,' '--Liquidity and Capital
Resources' and 'Unaudited Pro Forma Financial Information.' Net financial income
increased to $4.9 million in 1994 from $4.2 million in 1993.
Net income was $13.5 million in 1994 compared to a net loss of $7.2 million
in 1993.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and other liquidity has historically been used to fund
capital expenditures, working capital requirements, debt service and dividends
to Ciba. Following the Acquisition, annual interest expense of $38.8 million
associated with the borrowings of $330.8 million under the Credit Agreement and
$115.0 million under the Notes, as well as scheduled principal payments of term
loans under the Credit Agreement, will significantly increase liquidity
requirements. See '--Effect of Acquisition on Results of Operations.'
The Company's capital expenditures totaled $10.1 million for the six months
ended June 30, 1996, $25.9 million in 1995, $24.9 million in 1994 and $25.1
million in 1993. Capital expenditures are primarily for machinery, equipment and
the purchase and expansion of facilities, including, for 1994 and 1995, the
purchase of land for, and commencement of construction of, the Company's
Shanghai manufacturing facility. Capital expenditures for the balance of 1996
and for 1997, as a percentage of sales, are expected to remain relatively
constant with historical expenditures. In connection with the termination of the
Company's arrangements with its Japanese distributor, the Company will make
payments of up to SFr 8.0 million ($6.4 million at June 30, 1996), of which SFr.
$1.0 million has already been paid. See 'Business--Customers and Distribution.'
The Credit Agreement will provide for term loan borrowings in an aggregate
principal amount of approximately $275.0 million that will mature in 2002, 2003,
2004 and 2005 and a revolving credit facility with availability of $140.0
million, of which approximately $55.8 million will be drawn down in connection
with the Acquisition. An additional $109.2 million will be available to the
Company thereafter under the revolving credit facility and local working capital
facilities. Of this amount, SFr 37.9 million will be drawn under the revolving
credit facility temporarily to fund certain withholding taxes payable in
connection with the Acquisition, which withholding taxes will be fully refunded
following Closing. See 'Use of Proceeds.' The revolving credit facility will
mature in 2002 and will include letter of credit and swingline subfacilities.
Mandatory prepayments are required to be made in certain circumstances with the
proceeds of asset sales or issuances of capital stock or indebtedness and with
Excess Cash Flow (as defined). Borrowings under the Credit Agreement will bear
interest
37
<PAGE>
at floating rates that may be based on LIBOR rates for the relevant currency for
varying fixed interest periods or on the applicable Alternate Base Rate. The
Credit Agreement will impose certain restrictions on the Issuer and its
subsidiaries, including restrictions on the ability to incur indebtedness, pay
dividends, make investments, grant liens, sell significant assets and engage in
certain other activities. The Company must also comply with certain financial
covenants, including a minimum fixed charge coverage ratio and a maximum ratio
of consolidated indebtedness to EBITDA. Indebtedness under the Credit Agreement
will be secured by a first priority security interest in 65% of the capital
stock of Swiss Subholding and certain other non-U.S. subsidiaries and all other
material assets of the Company. For a more detailed summary of the terms of the
Credit Agreement, including amortization and interest rates, see 'Description of
Credit Agreement.'
The Notes will mature in 2006. The Notes may be required to be purchased by
the Company upon a Change of Control (as defined) and in certain circumstances
with the proceeds of asset sales. The Notes are subordinated to the indebtedness
under the Credit Agreement. The Indenture governing the Notes will impose
certain restrictions on the Company and its subsidiaries, including restrictions
on the ability to incur indebtedness, pay dividends, make investments, grant
liens and engage in certain other activities. See 'Description of Notes.'
Approximately $175.0 million of the borrowings under the Credit Agreement
and all of the borrowings under the Notes are expected to be denominated in U.S.
dollars. The balance of the borrowings under the Credit Agreement and under
local working capital facilities will be denominated in certain of the Company's
other principal trading currencies. Changes in exchange rates between the
currencies in which the Company generates cash flow and the currencies in which
its borrowings are denominated will affect the Company's liquidity. The Company
will seek to denominate the non-dollar denominated borrowings under the Credit
Agreement in currencies in which it generates cash flow or conducts significant
operations, in order to lessen the effect of currency exchange rates on the
Company's liquidity.
The Company currently believes that cash flow from operating activities,
together with borrowings available under the Credit Agreement and local working
capital facilities after the Acquisition, will be sufficient to fund currently
anticipated working capital needs and capital spending requirements as well as
debt service requirements for at least several years after the Acquisition, but
there can be no assurance that this will be the case.
TAXES
The Company is subject to taxation in many jurisdictions throughout the
world. The Company's effective tax rate and tax liability will be affected by a
number of factors, such as the amount of taxable income in particular
jurisdictions, the tax rates in such jurisdictions, tax treaties between
jurisdictions, the extent to which the Company transfers funds between
jurisdictions and income is repatriated, and future changes in law. Generally,
the tax liability for each legal entity is determined either (i) on a
non-consolidated basis or (ii) on a consolidated basis only with other entities
incorporated in the same jurisdiction, in either case without regard to the
taxable losses of non-consolidated affiliated entities. As a result, the Company
may pay income taxes in certain jurisdictions even though the Company on an
overall basis incurs a net loss for the period.
ENVIRONMENTAL MATTERS
The Company is subject to various environmental laws and regulations in the
jurisdictions in which it operates. The Company, like many of its competitors,
has incurred, and will continue to incur, capital and operating expenditures and
other costs in complying with such laws and regulations in both the United
States and abroad. The Company does not currently anticipate any material
capital expenditures for environmental control technology. Some risk of
environmental liability is inherent in the Company's business, and there can be
no assurance that material environmental costs will not arise in the future.
However, the Company does not anticipate any material adverse effect on its
results of operations or financial condition as a result of future costs of
environmental compliance. See 'Risk Factors--Environmental Matters' and
'Business--Environmental Matters.'
38
<PAGE>
INFLATION
Inflation can affect the costs of goods and services used by the Company.
The competitive environment in which the Company operates limits somewhat the
Company's ability to recover higher costs through increased selling prices.
Moreover, there may be differences in inflation rates between countries in which
the Company incurs the major portion of its costs and other countries in which
the Company sells its products, which may limit the Company's ability to recover
increased costs. The Company's growth strategy includes expansion in Latin
America and China, which have experienced inflationary conditions. To date,
inflationary conditions have not had a material effect on the Company's
operating results. However, as the Company's presence in Latin America and China
increases, these inflationary conditions could have a greater impact on the
Company's operating results.
SEASONALITY
The Company's business has historically experienced a slight amount of
seasonal variation, with sales in the first fiscal quarter slightly lower than,
and sales in the fourth fiscal quarter slightly higher than, sales in the second
and third fiscal quarters. This trend has a somewhat greater effect on income
from operations than on net sales due to the effect of fixed costs.
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISKS
The Company enters into currency forward and option contracts primarily as
a hedge against anticipated foreign currency exposures and not for speculative
purposes. Such contracts, which are types of financial derivatives, limit the
Company's exposure to both favorable and unfavorable currency fluctuations.
These contracts are adjusted to reflect market values as of each balance sheet
date, with the resulting unrealized gains and losses being recognized in
financial income or expense, as appropriate.
The Company may be exposed to credit losses in the event of nonperformance
by the counterparties to its foreign currency forward and option contracts. The
Company has no reason to believe, however, that such counterparties will not be
able to fully satisfy their obligations under these contracts. At December 31,
1995, the Company had foreign currency forward and option contracts maturing
during 1996 to purchase the equivalent of approximately $23.3 million and to
sell the equivalent of approximately $27.9 million in various currencies. These
contracts were used to limit its exposure to foreign currency fluctuations on
anticipated future cash flows, primarily for the delivery and receipt of United
States dollars, German marks and Japanese yen in exchange for Swiss francs. At
December 31, 1995, the fair value of such financial instruments, which the
Company recognized as net unrealized gains, was approximately $2.4 million.
NEW ACCOUNTING STANDARDS
Beginning January 1, 1996 the Company adopted Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 121 (SFAS
121), 'Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of'. SFAS 121 requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. In addition, SFAS 121
requires that long-lived assets and certain identifiable intangibles to be
disposed of be reported at the lower of carrying amount or fair value less cost
to sell. Adoption of SFAS 121 had no effect on the combined financial
statements.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
This Prospectus contains forward-looking statements, including statements
regarding, among other items, (i) the Company's growth strategies; (ii)
anticipated trends in the Company's business; and (iii) the Company's future
liquidity requirements and capital resources. These forward-looking statements
are based largely on the Company's expectations and are subject to a number of
risks and uncertainties, certain of which are beyond the Company's control.
Actual results could differ materially from those anticipated by these
forward-looking statements, as a result of the factors described in 'Risk
Factors.' In light of these risks and uncertainties, there can be no assurance
that events anticipated by the forward-looking statements contained in this
Prospectus will in fact transpire.
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<PAGE>
INDUSTRY
GENERAL
Weighing is one of the most broadly used measuring techniques, and its
results are often used as the basis of commercial transactions. The Company
believes that in 1995, the global market for weighing instruments for
laboratory, industrial and food retailing applications was approximately $4.5
billion. Laboratory weighing applications are an integral part of the research
and development process and include sample preparation, results determination
and quality control. Industrial and food retailing weighing applications are
often important to the user's business operations. Applications include, in
industrial applications, materials preparation, filling, formulating, counting,
checking and logistics; and, in food retailing applications, preparation,
portioning, pricing and inventory control. Application-specific products include
dynamic checkweighers that can measure the filling accuracy of hundreds of
packages per minute, heavy industrial scales for weighing trucks, trains, and
railcars, paint scales used in paint shops for blending, and postage scales for
determining freight tariffs for letters and parcels. Customers include
pharmaceutical, biotechnology, chemical, cosmetics, food and beverage, postal,
jewelry, metals, logistics, shipping and food retailing businesses, in addition
to schools, universities and government and private standards labs. The Company
does not manufacture or sell household weighing instruments, bulkweigh fillers
or continuous weighing products, and those markets are not discussed herein.
Weighing instruments often comprise a relatively small component of a
customer's aggregate capital spending but perform important functions in quality
control, process control and research and can improve productivity. As a result,
the Company believes that customers generally tend to value performance over
price. Weighing equipment manufacturers also provide a significant amount of
service and support to their customers, including repair, calibration,
certification and preventive maintenance, which generates recurring revenues.
The Company believes that customers often continue to purchase from their
existing vendor, due to the additional costs for training, spare parts, service
and systems integration associated with adding additional brands of weighing
equipment to their operations.
The market for weighing instruments, particularly those used in industrial
and food retailing applications, has traditionally been fragmented both
geographically and by type of application. Many manufacturers have a strong
market position in their home countries but a much smaller presence in other
markets. Similarly, manufacturers have tended to be focused on a particular
application or group of applications.
The Company believes that the developed markets (Europe, North America and
Japan) that it serves have recently experienced modest growth rates in weighing
markets. Laboratory market growth has been influenced by demand in the principal
end-user industries and customer replacement of older products with new products
designed to be integrated into an automated laboratory environment. Moreover, in
the United States, demand has been adversely affected by consolidation in the
pharmaceutical and chemical industries. See 'Risk Factors-- Significant Sales to
Pharmaceutical and Chemical Industries.' In the industrial and food retailing
market, growth has depended on the increasing use of weighing applications in
the control and regulation of manufacturing and logistics processes, on
customers' needs to upgrade to network-ready weighing equipment, and on general
growth in end-user industries. Asian markets (excluding Japan) have experienced
higher growth rates than the overall market. Growth in these emerging markets
has come from the establishment and growth of industries requiring additional
and more sophisticated weighing instruments and systems.
INDUSTRY TRENDS
Over the last five years, the weighing instruments industry has experienced
customer demand for products with sophisticated data handling and storage
capabilities that can be integrated into management information systems. In the
laboratory market, balances and other measurement instruments are now capable of
storing a large number of weighing results, performing statistical analyses and
transmitting results to computers and laboratory information management systems.
Laboratory customers have also demanded instruments that improve research
productivity by adding automation. For example, titrators have been increasingly
paired with auto-samplers, which allow a technician to set up dozens of samples
for testing automatically. The industrial and food retailing market has
experienced a similar trend, as small groceries are replaced by supermarkets and
hypermarkets. Retail counter-top scales (for the weighing of perishable goods)
now include database and network functions. This
40
<PAGE>
enables the scale to download price information from the store's master price
database and provide information on sales by article, which can be integrated
into the store's inventory control system. The store's master ordering system is
then able to calculate shrinkage and store inventory levels based on the weight
of goods processed and automatically reorder perishable goods via electronic
data interchange when inventory levels reach a pre-set reorder point. Similarly,
weighing instruments have become integrated into manufacturing plants'
information systems as the primary means for the tracking and control of
inventory. As they have become more integrated into the manufacturing process,
weighing instruments have also been combined with multiple input/output devices:
bar-code readers, printers and data-storage devices.
As quality laboratory and manufacturing standards become more widely
adopted, the accuracy of weighing instruments and the ability to certify the
accuracy of results becomes increasingly important to purchasers of weighing
instruments. For example, ISO 9001 standards and good laboratory and
manufacturing practices, which are voluntarily adopted by participating
companies, require the development of compliance procedures that must be adhered
to throughout the relevant laboratory or production process. These procedures
include periodic calibration and certification of measurement instruments.
Certified instruments must be utilized throughout the process, and each step in
the process must be accurately recorded in accordance with specified procedures
so that results can be accurately traced and reproduced.
Historically, weights and measures regulation has been at the national
level. As a result, products had to meet numerous different national regulatory
requirements. National requirements have been harmonized by the EU and also
worldwide by the Organization Internationale de Metrology Legale, which sets
international weights and measures standards. Harmonization has facilitated the
ability of multinational weighing instrument manufacturers to manufacture
products that meet all relevant regulatory requirements and the development of
broader-based markets for their product lines. In recent years, some governments
have begun to privatize the inspection of weighing instruments used in
commercial transactions. ISO-certified manufacturers of weighing instruments,
such as Mettler-Toledo, whose after-sales service technicians already perform
similar services for customers, are well situated to take over the inspection
process from governments wishing to privatize this function.
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BUSINESS
GENERAL
Mettler-Toledo is the world's largest manufacturer and marketer of weighing
instruments for use in laboratory, industrial and food retailing applications.
The Company focuses on the high value-added segments of the weighing instruments
market by providing solutions for specific applications. The Company also
manufactures and sells certain related laboratory measurement instruments, with
one of the top three market positions worldwide in titrators, thermal analysis
systems, pH meters, and lab reactors. Mettler-Toledo services a worldwide
customer base, with 1995 net sales of $850 million, which were derived 52% in
Europe, 37% in North and South America and 11% in Asia and other markets. The
Company has a global manufacturing presence, with manufacturing facilities in
Europe, the United States and Asia.
HISTORY
The Company traces its roots to the invention of the single pan analytical
balance by Dr. Erhard Mettler and the formation of Mettler Instrumente AG
('Mettler') in 1945. During the 1970s and 1980s, Mettler expanded from
laboratory balances into industrial and food retailing products, and it
introduced the first fully electronic precision balance in 1973. The Toledo
Scale Company ('Toledo Scale') was founded in 1901 and developed a leading
market position in the industrial weighing market in the United States. During
the 1970s, Toledo Scale expanded into the food retailing market. In 1981, Toledo
Scale set up a joint venture in Changzhou, China, which gave it early access to
the large potential Chinese weighing market. Following the 1989 acquisition of
Toledo Scale by Mettler, the name of the Company was changed to Mettler-Toledo
to reflect the combined strengths of the two companies and to capitalize on
their historic reputations for quality and innovation. During the past 15 years,
the Company has grown through other acquisitions that complemented existing
geographic markets and product lines. In 1986, Mettler acquired the Ingold Group
of companies, manufacturers of electrodes, and Garvens Kontrollwaagen AG, a
maker of dynamic checkweighers. Toledo Scale acquired Hi-Speed Checkweigher Co.,
Inc. in 1981. In 1990, the Company acquired Ohaus Corporation, a manufacturer of
laboratory balances.
Ciba determined to sell the Mettler-Toledo Group following its decision to
dispose of certain businesses outside of its core businesses.
MARKET LEADERSHIP
Mettler-Toledo is the only company to offer weighing products for
laboratory, industrial and food retailing applications throughout the world. The
Company believes that in 1995, the global market for weighing instruments for
laboratory, industrial and food retailing applications was approximately $4.5
billion and that the Company held a market share more than two times greater
than its nearest competitor. The Company believes that, in 1995, it had an
approximate 40% market share of the global market for laboratory balances,
including the largest market share in each of Europe, the United States and Asia
(excluding Japan), and one of the three leading positions in Japan. In the
industrial and food retailing market, the Company believes it has the largest
market share in Europe and in the United States. In Asia, the Company has a
substantial, rapidly growing industrial and food retailing business supported by
its established manufacturing presence in China. The Company attributes its
worldwide market leadership position to the following competitive strengths:
Brand Recognition. The Mettler-Toledo brand name is identified worldwide
with accuracy, reliability and innovation. The Company's brand name is so well
recognized that laboratory balances are often referred to as 'Mettlers.' Brand
recognition is important because weighing applications significantly impact
customers' product quality, productivity, cost and regulatory compliance. As a
result, customers tend to emphasize accuracy, product reliability, technical
innovation, reputation and past experience with a manufacturer's products when
making their purchasing decisions for weighing instruments.
Technological Innovation. Mettler-Toledo has a long and successful track
record of innovation, as demonstrated by the invention of the single-pan
analytical balance in 1945 and the introduction of the first fully electronic
precision balance in 1973. The Company has continued to be at the forefront of
weighing technology, with several recent innovations, including its ID 20
terminal and 'Brickstone' weighing sensor technology. The
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Company has particular expertise in sensor technology, electronics and software,
and in the industrial design of measurement instruments. The Company believes it
is the global leader in providing sophisticated features, such as data-handling
and storage capabilities, integration into management information systems and
improved productivity through automation, all of which are increasingly
important to users of weighing instruments. The Company devotes substantial
resources to research and product development in order to maintain its
competitive advantage in technological innovation.
Comprehensive Product Range. Mettler-Toledo manufactures a more
comprehensive range of weighing instruments than any of its competitors. The
Company's broad product line addresses a wide range of weighing applications
across many industries and regions. Within an industry, the Company offers
multiple products to meet customers' requirements. Its broad range of products
allows the Company to leverage its manufacturing and distribution capabilities,
sales and service organization and product development activities.
Global Sales and Service. The Company has the only global sales and
service organization among weighing instruments manufacturers. At June 30, 1996,
this organization consisted of 2,700 employees organized into locally based,
customer-focused groups that provide prompt service and support to the Company's
customers and distributors in virtually all major markets across the globe. The
local focus of the Company's sales and service organization enables the Company
to adapt marketing and service efforts to different cultural and economic
conditions, and provides feedback for manufacturing and product development.
Largest Installed Base. The Company believes that it has the largest
installed base of weighing instruments in the world. Service revenues from this
installed base provide a strong, stable source of recurring revenue,
representing approximately 17% of net sales in 1995. The Company believes that
its installed base represents a competitive advantage with respect to repeat
purchases. Customers tend to remain with an existing supplier who can provide
accurate and reliable products and related services. In addition, switching to a
new instrument supplier entails additional costs to the customer for training,
spare parts, service and system integration requirements. Close relationships
and frequent contact with its broad customer base provide the Company with sales
leads and new product and application ideas.
Diversity of Revenue Base. The Company's revenue base is widely
diversified by geographic region, by type of customer and by individual
customer. The Company's broad range of product offerings is utilized in many
different industries, from chemicals and pharmaceuticals to food processing to
transportation to food retailing. The Company supplies customers in over 100
countries, and no one customer accounted for more than 2% of 1995 net sales. The
Company's diverse revenue base reduces its exposure to regional or
industry-specific economic conditions.
BUSINESS STRATEGY
The Company's strategy is to enhance its position as global market leader
by providing the most comprehensive, innovative and reliable weighing solutions.
The Company plans to actively pursue the following initiatives to increase
revenues and profitability:
Product Innovation. The Company intends to continue to invest in product
innovation in order to provide technologically advanced products to its
customers for existing and new applications. Over the last three calendar years,
the Company invested approximately $149 million in research and development,
which has resulted in a pipeline of new and updated products. A recent example
of the Company's extensive product development efforts is the innovative ID 20
terminal for use in the Company's range of industrial scales. ID 20 includes the
first personal computer interface to be certified by weights and measures
regulators, combined with an ergonomically designed personal computer terminal
for industrial applications. Other recent examples include a new moisture
analyzer, a dimensioning system for logistics applications that combines volume
and weight measurements, a new generation of postal meters and a mid-range food
retailing scale. The Company is also focused on innovations that can reduce its
production costs. For example, the Company's new 'Brickstone' weighing sensor
technology, in addition to providing greater accuracy, reduces from
approximately 100 to approximately 50 the number of parts in the sensor, and
thus significantly reduces manufacturing costs and the time and expense of
design changes.
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Increased Penetration of Developed Markets. The Company intends to
leverage its brand name and existing infrastructure to further penetrate
selected geographic regions and product lines in Europe, the United States and
Japan. For example, in European food retailing products, the Company plans to
expand from its strong base in German-speaking countries into other countries.
In addition, the Company plans to increase penetration with shipping and
logistics businesses by introducing a new weighing and dimensioning product. The
Company also continues to take advantage of the standardization of weights and
measures, both in the European Union and worldwide, which favors a manufacturer
with a global presence, such as the Company.
Further Expansion in Emerging Markets. The Company believes that global
recognition of the Mettler-Toledo brand name and the Company's global sales and
service organization position the Company to take advantage of continued growth
opportunities in emerging markets. In 1995, the Company had net sales of $69
million in Asia (excluding Japan) and Latin America, representing 8% of net
sales. In Asia (excluding Japan), it is the market leader in laboratory weighing
instruments and has a substantial and rapidly growing industrial and food
retailing business. The Company has been operating in China since 1987 through a
60%-owned joint venture, which owns one manufacturing facility, and the Company
plans to complete construction of a new wholly owned manufacturing facility in
Shanghai by the end of 1996. The Company believes that this manufacturing
infrastructure, as well as its sales and service organization in Asia and its
already substantial sales in Asia and Latin America, position it to take
advantage of further growth opportunities in emerging markets.
Reengineering and Cost Reductions. Over the last three years, the Company
has been successful at increasing its margins, despite negative currency
effects. These increases have been achieved through, among other things,
increased workforce flexibility, a reduction in its overall workforce, a shift
in the mix of its workforce toward higher growth, lower cost regions and the
introduction of new products with lower manufacturing costs. The Company is
currently implementing two projects which are aimed at reducing warehouse
capacity, improving inventory turnover and reducing materials handling costs.
The Company is restructuring the order and product delivery process in Europe to
enable the Company to deliver many of its products to its customers directly
from the manufacturing facility within several days. The Company is also
streamlining its European spare parts inventory management system. In addition
to continuing these cost-cutting efforts, the Company is also evaluating its
business strategy as an independent company after the Acquisition and believes
that it can support continued sales growth while further reducing its overall
cost base. In July 1996, in anticipation of the consummation of the Acquisition,
the Company announced the closure of its Westerville, Ohio facility. In
addition, the Company will implement a targeted workforce reduction by the end
of 1996. The Company expects that these two additional projects will result in
annual cost reductions of $8.3 million.
Pursue Selected Acquisition Opportunities. The Company has a proven record
of acquiring and integrating businesses into existing operations. As an
independent company, Mettler-Toledo plans to more actively pursue additional
product lines and distribution channels through acquisitions, strategic
alliances and joint ventures. The Company believes that by taking advantage of
its brand name and global sales and service organization it can expand
distribution of acquired product lines and operate acquired businesses more
efficiently.
PRODUCTS
Laboratory
The Company manufactures and markets a complete range of laboratory
balances, as well as other selected laboratory measurement instruments, such as
titrators, thermal analysis systems, pH meters and lab reactors, for laboratory
applications in research and development, quality assurance, production and
education. Laboratory products accounted for approximately 37% of the Company's
net sales in 1995 (including revenues from related after-sale service). The
Company believes that it has an approximate 40% share of the global market for
laboratory balances and is among the top three worldwide producers of titrators,
thermal analysis systems, pH meters and lab reactors. The Company believes it
has the leading market share for laboratory balances in Europe, the United
States and Asia (excluding Japan) and one of the three leading positions in
Japan.
Balances. The balance is the most common piece of equipment in the
laboratory. The Company believes that it sells the highest performance
laboratory balances available on the market, with weighing ranges up to 32
kilograms and down to one ten-millionth of a gram. The Mettler-Toledo name is
one of the best known names in
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laboratory instruments, with a reputation for accuracy, reliability and
innovation. This reputation, in management's judgment, constitutes one of the
Company's principal competitive strengths.
In order to cover a wide range of customer needs and price points,
Mettler-Toledo markets precision balances, analytical and semimicrobalances,
microbalances and ultramicrobalances in three principal product tiers offering
different levels of functionality. High-end balances provide maximum automation
of calibration, application support and additional functions. Mid-level balances
provide a more limited but still extensive set of automated features and
software applications, while basic level balances provide simple operations and
a limited feature set. The Company also manufactures mass comparators, which are
used by weights and measures regulators as well as laboratories to ensure the
accuracy of reference weights. Due to the wide range of functions and features
offered by the Company's products, prices vary significantly. A typical
mid-range precision balance is priced at approximately $2,500 and a typical
microbalance is priced at approximately $14,000.
The Company regularly introduces new features and updated models in its
lines of balances. For example, the Company's DeltaRange models permit weighing
of light and heavy samples on the same balance without the need for difficult
adjustments, a function particularly useful in dispensing and formula weighing.
High-end balances are equipped with fully automatic calibration technology.
These balances are carefully calibrated many times in controlled environments,
with the results of the calibrations incorporated into built-in software, so
that adjustments to ambient temperature and humidity can automatically be made
at any time. The Company also offers universal interfaces that offer
simultaneous connection of up to five peripheral devices. The customer can then
interface one balance with, for example, a computer for further processing of
weighing data, a printer for automatically printing results and a bar-code
reader for sample identification.
In addition to Mettler-Toledo brand products, the Company also manufactures
and sells balances under the brand name 'Ohaus.' Ohaus brand products include
triple-beam balances, strain gauge balances and electronic balances for the
educational market and other markets in which customers are interested in lower
cost, a more limited set of features and less comprehensive service.
Titrators. Titrators measure the chemical composition of samples. The
Company's high-end titrators are multi-tasking models, which can perform two
determinations simultaneously. They permit high sample throughputs and have
extensive expansion capability and flexibility in calculations, functions and
parameters. Lower-range models permit common determinations to be stored in a
database for frequent use. Titrators are used heavily in the food and beverage
industry. A typical titrator is priced at approximately $12,000.
Thermal Analysis Systems. Thermal analysis systems measure different
properties, such as weight, dimension and energy flow, at varying temperatures.
The Company's thermal analysis products include full computer integration and a
significant amount of proprietary software. Thermal analysis systems are used
primarily in the plastics and polymer industries. A typical thermal analysis
system is priced at approximately $50,000.
pH Meters. A pH meter measures acidity in a laboratory sample and is the
second most widely used measurement instrument in the laboratory, after the
balance. The Company manufactures desktop models and portable models. Desktop
models are microprocessor-based instruments, offering a wide range of features
and self-diagnostic functions. Portable models are waterproof, ultrasonically
welded and ergonomically designed, and permit later downloading of data to a
computer or printer using an interface kit and custom software. pH meters are
used in a wide range of industries. A typical pH meter is priced at
approximately $1,200.
Lab Reactors and Reaction Calorimeters. Lab reactors and reaction
calorimeters are used to simulate an entire chemical manufacturing process in
the laboratory before proceeding to production, in order to ensure the safety
and feasibility of the process. The Company's products are fully
computer-integrated, with a significant software component, and offer wide
flexibility in the structuring of experimental processes. Lab reactors and
reaction calorimeters are typically used in the chemical and pharmaceutical
industries. A typical lab reactor is priced at approximately $140,000.
Electrodes. The Company manufactures electrodes for use in a variety of
laboratory instruments and in-line process applications. Laboratory electrodes
are consumable goods used in pH meters and titrators, which may be replaced many
times during the life of the instrument. In-line process electrodes are used to
monitor
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production processes, for example, in the beverage industry. A typical in-line
process electrode is priced at approximately $1,600.
Other Instruments. The Company sells density and refractometry
instruments, which measure chemical concentrations in solutions. These
instruments are sourced through a marketing joint venture with a third-party
manufacturer, but are sold under the Mettler-Toledo brand name. In addition, the
Company manufactures and sells moisture analyzers, which precisely determine the
moisture content of a sample by utilizing an infrared dryer to evaporate
moisture.
Industrial and Food Retailing
Weighing is one of the most broadly used measurement techniques in industry
and food retailing. The Company's industrial and food retailing weighing and
related products include bench and floor scales for standard industrial
applications, truck and railcar scales for heavy industrial applications,
checkweighers (which determine the weight of goods in motion), scales for use in
food retailing establishments and specialized software systems for industrial
processes. Increasingly, many of the Company's industrial and food retailing
products can integrate weighing data into process controls and information
systems. The Company's industrial and food retailing products are also sold to
original equipment manufacturers ('OEMs'), which incorporate the Company's
products into larger process solutions and comprehensive food retailing checkout
systems. At the same time, the Company's products themselves include significant
software content and additional functions including networking, printing and
labeling capabilities, and the incorporation of other measuring technologies
such as dimensioning. The Company works with customer segments to create
specific solutions to their weighing needs. The Company has also recently worked
closely with the leading manufacturer of postal meters to develop a new
generation of postal metering systems.
Industrial and food retailing products accounted for more than 60% of the
Company's net sales in 1995 (including revenues from related after-sale
service). The Company believes that it has the leading position in industrial
and food retailing sales in Europe and in the United States. In Asia, the
Company has a substantial, rapidly growing industrial and food retailing
business supported by established manufacturing capabilities in China. The
Company believes that it is the only company with a true global presence across
industrial and food retailing weighing applications.
Standard Industrial Products. The Company offers a complete line of
standard industrial scales, such as bench scales and floor scales, for weighing
loads from a few grams to loads of several thousand kilograms in applications
ranging from measuring materials in chemical production to weighing mail and
packages. Product lines include the 'Spider' range of scales, often used in
receiving and shipping departments in counting applications; 'TrimWeigh' scales,
which determine whether an item falls within a specified weight range, and are
primarily used in the food industry; 'Mentor SC' scales, for counting parts; and
precision scales for formulating and mixing ingredients. The Company's
'MultiRange' products include standardized software which uses the weight data
obtained to calculate other parameters, such as price or number of pieces. The
modular design of these products facilitates the integration of the Company's
weighing equipment into a computer system performing other functions, like
inventory control or batch management. Prices vary significantly with the size
and functions of the scale, generally ranging from $1,000 to $20,000.
Heavy Industrial Products. The Company's primary heavy industrial products
are scales for weighing trucks or railcars (i.e., weighing bulk goods as they
enter a factory or at a toll station). The Company's truck scales, such as the
'DigiTOL TRUCKMATE,' generally have digital load cells, which offer significant
advantages in serviceability over analog load cells. Heavy industrial scales are
capable of measuring weights up to 500 tons and permit accurate weighing under
extreme environmental conditions. The Company also offers advanced computer
software that can be used with its heavy industrial scales to permit a broad
range of applications. Truck scales' prices generally range from $25,000 to
$50,000.
Dynamic Checkweighing. The Company offers solutions to checkweighing
requirements in the food, pharmaceutical, chemical and cosmetic industries,
where accurate filling of packages is required, and in the transportation and
package delivery industries, where tariffs are levied based on weight.
Customizable software applications utilize the information generated by
checkweighing hardware to find production flaws, packaging and labeling errors
and nonuniform products, as well as to sort rejects and record the results.
Mettler-Toledo
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checkweighing equipment can accurately determine weight in dynamic applications
at speeds of up to several hundred units per minute. Checkweighers generally
range in price from $8,000 to $40,000.
Food Retailing Products. Supermarkets, hypermarkets and other food retail
establishments make use of multiple weighing applications for the handling of
perishable goods from backroom to checkout counter. For example, perishable
goods are weighed on arrival to determine payment to suppliers and some of these
goods are repackaged, priced and labeled for sale to customers. Other goods are
kept loose and selected by customers and either weighed at the produce or deli
counter or at the check-out counter.
The Company offers stand-alone scales for basic counter weighing and
pricing, price finding, and printing. In addition, the Company offers network
scales and software, which can integrate backroom, counter, self-service and
checkout functions, and can incorporate weighing data into a supermarket's
overall perishable goods management system. Backroom products include dynamic
weighing products, labeling and wrapping machines, perishable goods management
and data processing systems. In some countries in Europe, the Company also sells
slicing and mincing equipment. Prices for food retailing scales generally range
from $800 to $5,000, but are often sold as part of comprehensive weighing
solutions.
Systems. The Company's systems business consists of software applications
for drum filling in the food and chemical industries and batching systems in the
glass industry. The software systems control or modify the manufacturing
process.
CUSTOMERS AND DISTRIBUTION
The Company's business is geographically diversified, with 1995 net sales
derived 52% in Europe, 37% in North and South America and 11% in Asia and other
markets. The Company's customer base is also diversified by industry and by
individual customer. The Company's largest single customer accounted for no more
than 2% of 1995 net sales.
Laboratory
Principal customers for laboratory products include chemical,
pharmaceutical and cosmetics manufacturers; food and beverage makers; the
metals, electronics, plastics, transportation, packaging, logistics and rubber
industries; the jewelry and precious metals trade; educational institutions; and
government standards labs. Balances and pH meters are the most widely used
laboratory measurement instruments and are found in virtually every laboratory
across a wide range of industries. Other products have more specialized uses.
The Company's laboratory products are sold in more than 100 countries
through a worldwide distribution network. The Company's extensive direct
distribution network and its dealer support activities enable the Company to
maintain a significant degree of control over the distribution of its products.
In markets where there are strong laboratory distributors, such as the United
States, the Company uses them as the primary marketing channel for lower- and
mid-price point products. This strategy allows the Company to leverage the
strength of both the Mettler-Toledo brand and the laboratory distributors'
market position into sales of other laboratory measurement instruments. The
Company provides its distributors with a significant amount of technical and
sales support. High-end products are handled by the Company's own sales force.
There has been recent consolidation among distributors in the United States
market. While this consolidation could adversely affect the Company's U.S.
distribution, the Company believes its leadership position in the market gives
it a competitive advantage when dealing with its U.S. distributors. Asian
distribution is primarily through distributors, while European distribution is
primarily through direct sales. European and Asian distributors are generally
fragmented on a country-by-country basis. Effective at the end of 1996, the
Company will distribute laboratory products directly in Japan and will pay its
current distributor up to SFr 8.0 million ($6.4 million at June 30, 1996) to
terminate its existing arrangement (of which approximately SFr 1.0 million has
already been paid).
Ohaus brand products are generally positioned in alternative distribution
channels to those of Mettler-Toledo brand products. In this way, the Company is
able to fill a greater number of distribution channels and increase penetration
of its existing markets. Since the acquisition of Ohaus in 1990, the Company has
expanded the Ohaus brand beyond its historical U.S. focus. Ohaus brand products
are sold exclusively through distributors.
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Industrial and Food Retailing
Customers for Mettler-Toledo industrial products include chemical companies
(e.g., formulating, filling and bagging applications), food companies (e.g.,
packaging and filling applications), electronics and metal processing companies
(e.g., piece counting and logistical applications), transportation companies
(e.g., sorting, dimensioning and vehicle weighing applications) and auto body
paint shops, which mix paint colors based on weight. The Company's products for
these industries share similar weighing technology, and often minor
modifications of existing products can make them useful for applications in a
variety of industrial processes. The Company also sells to OEMs which integrate
weighing modules into larger process control applications, or comprehensive
packaging lines. OEM applications often include software content and technical
support, as the Company's weighing module must communicate with a wide variety
of other process modules and data management functions. The Company's products
are also purchased by engineering firms, systems integrators and vertical
application software companies.
Customers for food retailing products include supermarkets, hypermarkets
and smaller food retailing establishments. The North American and European
markets include many large supermarket chains. In most of the Company's markets,
food retailing continues to shift to supermarkets and hypermarkets from 'mom and
pop' grocery stores. While supermarkets and hypermarkets generally buy less
equipment per customer, they tend to buy more advanced products that require
more electronic and software content. In emerging markets, however, the highest
growth is in basic scales. As with industrial products, the Company also sells
food retailing products to OEMs for inclusion in more comprehensive checkout
systems. For example, the Company's checkout scales are incorporated into
scanner-scales, which can both weigh perishable goods and also read bar codes on
other items. Scanner-scales are in turn integrated with cash registers to form a
comprehensive checkout system.
The Company's industrial products are sold in more than 100 countries and
its food retailing products in 20 countries. In the industrial and food
retailing market, the Company distributes directly to customers (including OEMs)
and through distributors. In the United States, distributor sales slightly
exceed direct sales. Distributors are highly fragmented in the U.S., with many
small 'scale houses' selling the Company's products. In Europe, direct sales
predominate, with distributors used in certain cases. As in its laboratory
distribution, the Company provides significant support to its distributors.
SALES AND SERVICE
Market Organizations
The Company has 31 geographically-focused market organizations ('MOs')
around the world that are responsible for all aspects of sales and service. The
MOs are local marketing and service organizations designed to maintain close
relationships with the Company's customer base. Each MO has the flexibility to
adapt its marketing and service efforts to account for different cultural and
economic conditions. MOs also work closely with the Company's producing
organizations (described below) by providing feedback on manufacturing and
product development initiatives and relaying innovative product and application
ideas.
The Company has the largest field organization in the weighing industry,
with approximately 2,700 employees in sales, marketing and customer service
(including related administration) and after-sales technical service. This field
organization has the capability to provide service and support to the Company's
customers and distributors in virtually all major markets across the globe.
Sales managers and representatives interact across product lines and markets in
order to serve customers that have a wide range of weighing needs, such as
pharmaceutical companies that purchase both laboratory and industrial products.
The Company classifies customers according to their potential for sales and the
appropriate distribution channel is selected to service the customer as
efficiently as possible. Larger accounts tend to have dedicated sales
representatives. Other representatives are specialized by product line. Sales
representatives call directly on end-users either alone or, in regions where
sales are made through distributors, jointly with distributors. The Company
utilizes a variety of advertising media, including trade journals, catalogs,
exhibitions and trade shows. The Company also sponsors seminars, product
demonstrations and customer training programs. An extensive database on markets
helps the Company to gauge growth opportunities, target its message to
appropriate customer groups and monitor competitive developments.
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After-Sales Service
The Company believes that it has the largest installed base of weighing
instruments in the world. To support its installed base, the Company employs
service technicians who provide contract and repair services in all countries in
which the Company's products are sold. Service (representing service contracts,
repairs and replacement parts) accounted for approximately 17% of the Company's
total net sales in 1995. (Service revenue is included in the laboratory and
industrial and food retailing sales percentages given above.) Management
believes that service is a key part of its product offering and helps
significantly in repeat sales. The close relationships and frequent contact with
its large customer base provide the Company with sales opportunities and
innovative product and application ideas. Moreover, a global service network is
an important factor in the ability to expand in emerging markets. Widespread
adoption of quality laboratory and manufacturing standards and the privatization
of weights and measures certification are both favorable trends for the
Company's service business, as they tend to increase demand for on-site
calibration services.
The Company's service contracts provide for repair services within various
guaranteed response times, depending on the level of service selected. Many
contracts also include periodic calibration and testing. Contracts are generally
one year in length, but may be longer. The Company's own employees directly
provide all service on Mettler-Toledo products. If the service contract also
includes products of other manufacturers, the Company will generally perform
calibration, testing and basic repairs directly, and contract out more
significant repair work. As application software becomes more complex, the
Company's service efforts increasingly include installation and customer
training programs as well as product service.
Warranties on Mettler-Toledo products are generally one year. Based on past
experience, the Company believes its reserves for warranty claims are adequate.
RESEARCH AND PRODUCT DEVELOPMENT; MANUFACTURING
Producing Organizations
The Company is organized into a number of producing organizations ('POs'),
which are specialized centers responsible for product development, research and
manufacturing. At June 30, 1996, POs included approximately 3,900 employees
worldwide, and consist of product development teams whose members are from
marketing, customer service, development, research, manufacturing, engineering
and purchasing. POs also often seek customer input to ensure that the products
developed are tailored to market needs. The Company has organized POs in order
to reduce product development time, improve its customer focus, reduce costs and
maintain technological leadership. The POs work together to share ideas and best
practices. Some employees are in both MOs and POs. The Company is currently
implementing a number of projects that it believes will result in increased
productivity and lower costs. For example, the Company is restructuring the
order and product delivery process in Europe to enable the Company to deliver
many of its products to its customers directly from the manufacturing facility
within several days, which minimizes the need to store products in decentralized
warehouses. In addition, the Company is centralizing its European spare parts
inventory management system.
Research and Product Development
Management believes that technical innovation and the speed with which new
products are brought to market are fundamental to the Company's leading market
position. For this reason it closely integrates research and development with
marketing, manufacturing and product engineering. The Company has nearly 600
professionals in research and development and product engineering.
The Company's principal product development activities involve applications
improvements to provide enhanced customer solutions, systems integration and
product cost reduction. However, the Company also actively conducts research in
basic weighing technologies. As part of its research and development activities,
the Company has frequent contact with university experts, industry professionals
and the governmental agencies responsible for weights and measures. In addition,
the Company's in-house development is complemented by technology and product
development alliances with customers and OEMs.
49
<PAGE>
An important recent example of innovation at the Company is the
'Brickstone' technology. Created from a solid block of aluminum utilizing the
Company's proprietary design and manufacturing know-how, the Brickstone load
cell component eliminates many of the complex mechanical linkages in a weighing
sensor and reduces the number of parts in the sensor from approximately 100 to
approximately 50. The Brickstone sensor permits more accurate weighing, lower
manufacturing costs and cheaper and faster design changes. Brickstone technology
has been incorporated into certain of the Company's products, and the Company
expects to expand its use to additional product lines in the future. Another
important recent innovation is the ID 20 terminal for use in the Company's range
of industrial scales. The ID 20 includes the first personal computer interface
to be certified by weights and measures regulators, combined with an
ergonomically designed personal computer terminal for industrial applications.
The Company has also introduced the first digital load cell, which is used
primarily in the Company's truck weighing products. In addition, together with a
strategic partner, the Company is currently testing at a selected group of
customers a number of weighing and dimensioning devices, which accurately
determine volume and weight simultaneously. The Company is also testing a
household waste collection system that allows local municipalities to charge for
waste removal according to weight.
The Company has been spending an increasing proportion of its research and
development budget on software development. Software development for weighing
applications includes application-specific software, as well as software
utilized in sensor mechanisms, displays, and other common components, which can
be leveraged across the Company's broad product lines. Application-specific
projects include the Company's recently developed thermal analysis system,
memory cards used in titrators to perform industry-specific processes, and
software for use in truck scales.
The Company spent $54.5 million on research and development in 1995, $48.0
million in 1994 and $46.4 million in 1993, which the Company believes was more
than any of its competitors. Including costs associated with customer-specific
engineering projects, which are included in cost of sales for financial
reporting purposes, the Company spent approximately 7.3% of net sales on
research and development in 1995.
Manufacturing
The Company's manufacturing strategy is to produce directly those
components that require its specific technical competence, or for which
dependable, high-quality suppliers cannot be found. Many of these Company-
manufactured components can be utilized across a broad range of the Company's
products. The Company contracts out the manufacture of its other component
requirements. Consequently, much of the Company's manufacturing capability
consists of assembly of components sourced from others. The Company utilizes a
wide range of suppliers and it believes its supply arrangements to be adequate.
From time to time the Company relies on one supplier for all its requirements of
a particular component, but in such cases the Company believes adequate
alternative sources would be available if necessary. Supply arrangements for
electronics are generally made globally. For mechanical components, the Company
generally uses local sources to optimize materials flow.
The Company's manufacturing operations emphasize product quality. Most of
its products require very strict tolerances and exact specifications. The
Company utilizes an extensive quality control system that is integrated into
each step of the manufacturing process. This integration permits field service
technicians to trace important information about the manufacture of a particular
unit, which facilitates repair efforts and permits fine-tuning of the
manufacturing process. Many of the Company's measuring instruments are subjected
to an extensive calibration process that allows the software in the unit to
automatically adjust for the impact of temperature and humidity. The Company
believes that product quality, which translates into accuracy and reliability,
is crucial to its brand strength, its ability to make repeat sales to existing
customers, and its ability to offer after-sales service at competitive prices.
The Company has six manufacturing plants in the U.S. (after giving effect
to the closure of the Westerville, Ohio facility), four in Switzerland, two in
Germany and two in China, of which one is a 60% owned joint venture and the
other, the Shanghai facility, is beginning to produce laboratory products and is
expected to be completed by the end of 1996. Laboratory products are produced
mainly in Switzerland and to a lesser extent in the United States, while
industrial and food retailing products are produced in all four countries. The
Company believes its manufacturing capacity is sufficient to meet its present
and currently anticipated needs.
50
<PAGE>
Backlog
Manufacturing turnaround time is generally sufficiently short so as to
permit the Company to manufacture to fill orders for most of its products, which
helps to limit inventory costs. Backlog is therefore generally a function of
requested customer delivery dates and is typically no longer than one to two
months.
EMPLOYEES
As of June 30, 1996, the Company had approximately 6,400 employees
throughout the world, including more than 3,300 in Europe and more than 2,400 in
North and South America. Management believes that its relations with employees
are good. The Company has not suffered any material employee work stoppage or
strike in its worldwide operations during the last five years. Labor unions do
not represent a meaningful number of the Company's employees.
In certain of its facilities, the Company has instituted a flexible
workforce environment, in which hours vary depending on the quantity of
workload. The Company believes that this flexible working environment enhances
employees' involvement, thus increasing productivity, and improves efficient
payroll management by permitting the Company to adjust staffing to match
workload to a greater degree without changing the size of the overall workforce.
INTELLECTUAL PROPERTY
The Company holds more than 1,150 patents and trademarks, primarily in the
United States, Switzerland, Germany and Japan and, to a lesser extent, in China.
The Company's products generally incorporate a wide variety of technological
innovations, many of which are protected by patents and many of which are not.
Moreover, products are generally not protected as a whole by individual patents.
Accordingly, no one patent or group of related patents is material to the
Company's business. The Company also has numerous trademarks and considers the
Mettler-Toledo name and logo to be material to its business. The Company
regularly protects against infringement of its intellectual property.
REGULATION
The Company's products are subject to regulatory standards and approvals by
weights and measures regulatory authorities in the countries in which it sells
its products. Weights and measures regulation has been harmonized across the EU.
See 'Industry.' The Company's food processing and food retailing products are
subject to regulation and approvals by relevant governmental agencies, such as
the United States Food and Drug Administration. Products used in hazardous
environments may also be subject to special requirements. All of the Company's
electrical components are subject to electrical safety standards. The Company
believes that it is in compliance in all material respects with applicable
regulations.
ENVIRONMENTAL MATTERS
The Company is subject to various environmental laws and regulations in the
jurisdictions in which it operates, including those relating to air emissions,
wastewater discharges, the handling and disposal of solid and hazardous wastes
and the remediation of contamination associated with the use and disposal of
hazardous substances. The Company wholly or partly owns, leases or holds a
direct or indirect equity interest in a number of properties and manufacturing
facilities around the world, including the United States, Europe, Canada,
Mexico, Brazil, Australia and China. The Company, like many of its competitors,
has incurred, and will continue to incur, capital and operating expenditures and
other costs in complying with such laws and regulations in both the United
States and abroad.
The Company is currently involved in, or has potential liability with
respect to, the remediation of past contamination in certain of its presently
and formerly owned and leased facilities in both the United States and abroad.
In addition, certain of the Company's present and former facilities have or had
been in operation for many decades and, over such time, some of these facilities
may have used substances or generated and disposed of wastes which are or may be
considered hazardous. It is possible that such sites, as well as disposal sites
owned by third parties to which the Company has sent wastes, may in the future
be identified and become the subject of
51
<PAGE>
remediation. Accordingly, although the Company believes that it is in
substantial compliance with applicable environmental requirements and the
Company to date has not incurred material expenditures in connection with
environmental matters, it is possible that the Company could become subject to
additional environmental liabilities in the future that could result in a
material adverse effect on the Company's financial condition or results of
operations.
The Company is involved in litigation concerning remediation of hazardous
substances at its operating facility in Landing, New Jersey. On or about July
1988, AGP purchased 100% of the outstanding stock of Metramatic Corporation
('Metramatic'), a manufacturer of checkweighing equipment located in Landing,
from GEI International Corporation ('GEI'). GEI agreed to indemnify and hold
harmless AGP for certain pre-closing environmental conditions, including those
resulting in cleanup responsibilities required by the New Jersey Department of
Environmental Protection ('NJDEP') pursuant to the New Jersey Environmental
Cleanup Responsibility Act ('ECRA'). ECRA is now the Industrial Site Recovery
Act. Pursuant to a 1988 NJDEP administrative consent order naming GEI and
Metramatic as respondents, GEI has spent approximately $2 million in the
performance of certain investigatory and remedial work addressing groundwater
contamination at the site. However, a final remedy has not yet been selected by
NJDEP, and, therefore, future remedial costs are currently unknown. In 1992, GEI
filed a suit against AGP and various other parties including Hi-Speed
Checkweigher Co., Inc., a wholly-owned subsidiary of the Company that currently
owns the facility, to recover certain costs incurred by GEI in connection with
the site. Based on currently available information and the Company's rights of
indemnification from GEI, the Company believes that its ultimate allocation of
costs associated with the past and future investigation and remediation of this
site will not have a material adverse effect on the Company's financial
condition or results of operations.
In addition, the Company is aware that Toledo Scale, the former owner of
Toledo Scale or the Company has been named a potentially responsible party under
CERCLA or analogous state statutes at the following third-party owned sites with
respect to the alleged disposal at the sites by Toledo Scale during the period
it was owned by such former owner: Granville Solvents Site, Granville, Ohio;
Aqua-Tech Environmental, Inc. Site, Greer, South Carolina; and Seaboard Chemical
Company Site, Jamestown, North Carolina. The former owner has also been named in
a lawsuit seeking contribution pursuant to CERCLA with respect to the Caldwell
Trucking Site, New Jersey ('Caldwell Site') based on the alleged disposal at the
Caldwell Site by Toledo Scale during the former owner's period of ownership.
Pursuant to the terms of the stock purchase agreement between Mettler and the
former owner of Toledo Scale, the former owner is obligated to indemnify Mettler
for various environmental liabilities. To date, with respect to each of the
foregoing sites, the former owner has undertaken the defense and indemnification
of Toledo Scale. Although counsel for the former owner recently informed the
Company that it may seek recovery from the Company with respect to the Caldwell
Site, no formal demand has been received. Based on currently available
information and the Company's contractual rights of indemnification, the Company
believes that the costs associated with the investigation and remediation of
these sites will not have a material adverse effect on the Company's financial
condition or results of operations.
COMPETITION
The markets in which the Company operates are highly competitive. Because
of the fragmentation of weighing instruments markets, particularly the
industrial and food retailing market, both geographically and by application,
the Company competes with numerous regional or specialized competitors, many of
which are well-established in their markets. Some competitors are less leveraged
than the Company and/or are divisions of larger companies with potentially
greater financial and other resources than the Company. Although the Company
believes that it has certain competitive advantages over its competitors,
realizing and maintaining these advantages will require continued investment by
the Company in research and development, sales and marketing and customer
service and support. The Company has, from time to time, experienced price
pressures from competitors in certain product lines and geographic markets.
In the United States, the Company believes that the principal competitive
factors on which purchasing decisions are made are accuracy and durability,
while in Europe accuracy and service are the most important factors. In emerging
markets, where there is greater demand for less sophisticated products, price is
a more important factor than in developed markets. Competition in the United
States laboratory market is also influenced by the presence of large
distributors through which the Company and its competitors sell many of their
products.
52
<PAGE>
PROPERTIES
The following table lists the Company's principal operating facilities,
indicating the location, primary use and whether the facility is owned or
leased.
<TABLE>
<CAPTION>
LOCATION PRINCIPAL USE(1) OWNED/LEASED
- ----------------------------- ---------------------------------- ---------------
<S> <C> <C>
Europe:
Greifensee/Nanikon,
Switzerland............. Production, Corporate Headquarters Owned
Uznach, Switzerland........ Production Owned
Urdorf, Switzerland........ Production Owned
Schwerzenbach,
Switzerland............. Production Leased
Albstadt, Germany.......... Production Owned
Giesen, Germany............ Production Owned
Giessen, Germany........... Sales and Service Owned
Steinbach, Germany......... Sales and Service Owned
Viroflay, France........... Sales and Service Owned
Beersel, Belgium........... Sales and Service Owned
Tiel, Netherlands.......... Sales and Service Owned
Leicester, England......... Sales and Service Leased
Americas:
Worthington, Ohio.......... Production Owned
Spartanburg, South
Carolina................ Production Owned
Franksville, Wisconsin..... Production Owned
Ithaca, New York........... Production Owned
Wilmington,
Massachusetts........... Production Leased
Florham Park, New Jersey... Production Leased
Hightstown, New Jersey..... Sales and Service Owned
Burlington, Canada......... Sales and Service Owned
Mexico City, Mexico........ Sales and Service Leased
Other:
Shanghai, China(2)......... Production Leased
Building Owned;
Changzhou, China(3)........ Production Land Leased
Melbourne, Australia....... Sales and Service Leased
</TABLE>
- ------------------
(1) The Company also conducts research and development activities at certain of
the above facilities in Switzerland, Germany, the United States and, to a
lesser extent, China.
(2) Under construction. Scheduled for completion by the end of 1996.
(3) Held by a 60%-owned joint venture.
The Company believes its facilities are adequate for its current and
reasonably anticipated future needs.
LEGAL PROCEEDINGS
The Company is subject to routine litigation incidental to its business.
The Company is currently not involved in any legal proceeding that it believes
could have a material adverse effect upon its financial condition or results of
operations. See '--Environmental Matters' for information concerning legal
proceedings relating to certain environmental claims.
53
<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Issuer are:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------ --- --------------------------------------------------
<S> <C> <C>
Robert F. Spoerry....... 40 President and Chief Executive Officer and Director
Fred Ort................ 54 Head, Finance and Control
Karl M. Lang............ 49 Head, Laboratory Division
Lukas Braunschweiler.... 40 Head, Industrial and Retail (Europe)
John D. Robechek........ 48 Head, Industrial and Retail (Americas)
Peter Burker............ 50 Head, Human Resources
Thomas Rubbe............ 42 Head, Logistics and Information Systems
Thomas P. Salice........ 35 Director
Alan W. Wilkinson....... 40 Director
</TABLE>
Robert F. Spoerry has been President and Chief Executive Officer since
1993. He served as Head, Industrial and Retail (Europe) from 1987 to 1993. Mr.
Spoerry has been a Director since the formation of MT Acquisition Corp. in July
1996.
Fred Ort has been Head, Finance and Control since 1973.
Karl M. Lang has been Head, Laboratory Division since 1994. From 1991 to
1994 he was based in Japan as a representative of senior management with
responsibility for expansion of the Company's Asian operations.
Lukas Braunschweiler has been Head, Industrial and Retail (Europe) since
1995. From 1992 until 1995, he held various senior management positions with the
Landis & Gyr Group, a manufacturer of electrical meters. Prior to August 1992 he
was a Vice President in the Technology Group of Saurer Group, a manufacturer of
textile machinery.
John D. Robechek has been Head, Industrial and Retail (Americas) and
President of Mettler-Toledo, Inc., a U.S.-based subsidiary of the Company, since
1995. From 1990 through 1994 he served as Senior Vice President and managed all
of the Company's U.S. subsidiaries.
Peter Burker has been Head, Human Resources since 1994. From 1992 to 1994
he was Mettler-Toledo's General Manager in Spain, and from 1989 to 1991 he
headed the Company's operations in Italy.
Thomas Rubbe has been Head, Logistics and Information Systems since 1995.
From 1990 to 1995, he was head of Controlling, Finance and Administration with
the Company's German marketing organization.
Thomas P. Salice has been a Director since the formation of MT Acquisition
Corp. in July 1996. He is a Managing Director of AEA Investors and has been
associated with AEA Investors since June 1989. Mr. Salice is also a Director of
CasTech Aluminum Group Inc. and Waters Corporation.
Alan W. Wilkinson has been a Director since the formation of MT Acquisition
Corp. in July 1996. He has been a Managing Director of AEA Investors since
September 1989. Prior to his association with AEA Investors, Mr. Wilkinson was a
Vice President in the Merchant Banking and Mergers and Acquisitions divisions of
Lehman Brothers Inc., an investment banking firm.
Messrs. Spoerry, Salice and Wilkinson are directors of Holding. Mr. Spoerry
is President and Chief Executive Officer of Holding and Mr. Ort is Head, Finance
and Control.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to or accrued for
services performed by the Company's Chief Executive Officer and the four other
most highly compensated executives (collectively, the 'Named Executives') for
the year ended December 31, 1995.
54
<PAGE>
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) OPTIONS(#) COMPENSATION
- --------------------------------------------- ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Robert F. Spoerry
President and Chief Executive Officer...... 1995 $289,343 $ 85,871 300(3) $ 54,346(4)
Fred Ort
Head, Finance and Control.................. 1995 227,284 69,701 -- 70,804(4)
Karl M. Lang
Head, Laboratory........................... 1995 228,427 38,071 -- 60,321(4)
Lukas Braunschweiler
Head, Industrial and Retail (Europe)....... 1995 228,427 25,381 -- 50,460(4)
John D. Robechek
Head, Industrial and Retail (Americas)..... 1995 225,000 40,563 -- 6,168(5)
</TABLE>
- ------------------
(1) Amounts paid in Swiss francs (all amounts except those paid to Mr. Robechek)
converted to U.S. dollars at a rate of SFr 1.182 to U.S. $1.00, the average
exchange rate during the year ended December 31, 1995.
(2) Does not include bonuses paid by Ciba to the Named Executives for services
rendered to Ciba in connection with its efforts to sell the Company.
(3) Option to purchase the specified number of shares of Ciba common stock at an
exercise price of SFr 750 ($665 at the date of grant) per share. The fair
market value at the date of grant was SFr 764 ($678) per share.
(4) Represents Company contributions to the Mettler-Toledo Fonds (a Swiss
pension plan similar to a defined contribution plan under U.S. law). Fifty
percent of the amount shown is a required employee contribution under the
plan which the Company has contributed on behalf of the Named Executives,
and the other 50% is a required matching employer contribution.
(5) Includes $1,024 for the value of group life insurance over $50,000, $4,500
for the Company's contribution to Mr. Robechek's 401(k) plan account and
$644 for Mr. Robechek's profit sharing payout under the Company's
Performance Dividend Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION FOR OPTION/SAR
UNDERLYING GRANTED TO TERM
OPTIONS/SARS EMPLOYEES IN EXERCISE/BASE EXPIRATION -------------------------------------
NAME GRANTED (#)(1) FISCAL YEAR PRICE ($/SH) DATE 0%($) 5%($) 10%($)
- ----------------- -------------- ------------ -------------- -------------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert F. Spoerry 300 100% $665(2) April 25, 2005 $3,900(3) $131,817(4) $328,067(4)
</TABLE>
- ------------------
(1) Represents number of securities underlying an option to purchase Ciba
stock. The option was granted on April 25, 1995, would have vested as
to 150 shares after two years and as to 150 shares after four years and
would have expired in ten years (on April 25, 2005). In March 1996, the
option was accelerated for a one-month period only in connection with
the announcement of the Ciba merger with Sandoz. During that time, Mr.
Spoerry exercised both this option and a second option for 300 shares
(not required to be set forth above) that was granted in 1996. Mr.
Spoerry no longer has any outstanding options.
(2) Represents the exercise price of SFr 750 at the date of grant.
(3) Represents the difference between the exercise price and the per share
fair market value at the date of grant (SFr 764, or $678), multiplied
by the number of shares underlying the option.
(Footnotes continued on next page)
55
<PAGE>
(Footnotes continued from previous page)
(4) The assumed annual rates of appreciation over the term of the option
are set forth in accordance with rules and regulations adopted by the
Securities and Exchange Commission and do not represent the Company's
estimate of stock appreciation price. However, Mr. Spoerry has now
exercised all his options.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND OPTION/SAR VALUES AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT FISCAL IN-THE-MONEY OPTIONS/SARS
SHARES YEAR-END AT FISCAL YEAR-END
ACQUIRED ON VALUE (#) ($)
EXERCISE REALIZED ---------------------------- ------------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------- ----------- -------- ----------- ------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Spoerry -- -- -- 300 -- $ 69,000(1)
</TABLE>
- ------------------
(1) This represents the difference between the exercise price of SFr 750 ($652
at December 28, 1995) and the closing price of Ciba's common stock on
December 28, 1995 (SFr 1,015, or $882), multiplied by the 300 unexercised
shares. Since December 28, 1995, Mr. Spoerry exercised all outstanding
options and no longer has any options outstanding.
EMPLOYMENT AGREEMENTS; STOCK OPTIONS; MANAGEMENT EQUITY
The Company expects to negotiate new employment agreements with its senior
management to become effective following the Acquisition. Base salary of
executive officers under these agreements in the aggregate will not be
materially different from historical practice. The agreements will also include
bonuses contingent on meeting performance objectives and initial grants of
options to purchase non-voting common stock of MT Investors in amounts and at
prices to be determined. Exercise of such options will be subject to vesting
restrictions. Additional shares of non-voting common stock of MT Investors will
be reserved for future grants of options to the Company's management. Management
and other employees of the Company will contribute up to $15 million of the
equity of MT Investors. See 'The Acquisition.'
COMPENSATION OF DIRECTORS
All members of the Board of Directors of the Company are officers of the
Company or employees of AEA Investors and will not receive additional
compensation for being on the Board or its committees.
RETIREMENT PLANS
Mr. Robechek is covered under two pensions plans, the Mettler-Toledo
Retirement Plan and the Mettler-Toledo Supplemental Retirement Income Plan.
Benefits under these plans are determined by career average compensation rather
than final compensation. The annual accrual for each year under both plans is
the difference of 2% of annual compensation in a plan year and 0.6% of the
lesser of annual compensation or covered compensation (defined under the plans
as the average of the Social Security Taxable Wage Bases in effect for each
calendar year during the 35-year period ending on the last day of a given plan
year). The Mettler-Toledo Retirement Plan includes all compensation up to the
qualified plan limitations under the Internal Revenue Code of 1986, as amended
($150,000 per year in 1996) and the Mettler-Toledo Supplemental Retirement
Income Plan pays for benefits in excess of these limits. The accrued annual
benefit payable to Mr. Robechek under the Mettler-Toledo Retirement Plan is
$42,858.48 and the accrued annual benefit under the Mettler-Toledo Supplemental
Plan is $8,829.36, for a total annual retirement benefit of $51,687.84.
56
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Following the Acquisition, AEA Investors and the Company will be party to
an agreement pursuant to which AEA Investors will provide management, consulting
and financial services to the Company. Services will be provided in such areas
as the preparation and evaluation of strategic, operating, financial and capital
plans and the development and implementation of compensation and other incentive
programs. Such services will be provided by the managing directors and
professional staff of AEA Investors. In consideration for such services, AEA
Investors will be entitled to an annual fee in the amount of $1 million, plus
reimbursement for certain expenses and indemnification against certain
liabilities. The agreement further provides that in the event the Company
employs any employee of AEA Investors as an officer of the Company or otherwise,
and such employment involves a substantial amount of such employee's time, the
Company will compensate such employee at a reasonable rate. The Company believes
that the terms of these management arrangements are as favorable as could be
obtained from an unaffiliated third party. In connection with the Acquisition
and in consideration of services by AEA Investors in arranging, structuring, and
negotiating the terms of the Acquisition and the related financing transactions,
the Company will pay AEA Investors a transaction fee of $5.5 million and
reimburse AEA Investors for certain related expenses. The transaction fee and
such expenses are included in the fees and expenses incurred in connection with
the Acquisition described under 'Use of Proceeds' and will be funded through the
stated sources of funds disclosed thereunder.
Ciba will contribute $9.5 million (5%) of the total equity contributions to
MT Investors.
PRINCIPAL STOCKHOLDERS
Prior to the consummation of the Acquisition, the entities comprising the
Mettler-Toledo Group were indirectly owned by Ciba. Following the consummation
of the Acquisition, all of the capital stock of the Issuer will be directly
owned by Holding, a wholly owned subsidiary of MT Investors, and all of the
voting capital stock of MT Investors will be owned by AEA Investors, certain of
its investor-shareholders and/or certain members of its management and by Ciba
(which will hold 5% of the voting stock). AEA Investors, its
investor-shareholders and members of its management will also purchase nonvoting
stock representing a substantial portion of the total equity ownership interest
in MT Investors. Ciba will also purchase 5% of the nonvoting stock of MT
Investors. In connection with the Acquisition, members of senior management of
the Company are expected to purchase nonvoting stock of MT Investors and are
expected to be granted options to purchase additional nonvoting stock, which
together will constitute at least 16.5% of the equity of MT Investors, on a
fully diluted basis. The following table sets forth, after giving effect to the
Acquisition, information with respect to the beneficial ownership of the capital
stock of MT Investors by (i) each director of the Company, (ii) the Named
Executives and (iii) all directors and executive officers of the Company as a
group:
<TABLE>
<CAPTION>
SHARES OF NON-VOTING
CAPITAL STOCK(1)
------------------------------
NAME AND ADDRESS NUMBER OF SHARES % OF CLASS
- ----------------------------------------------------------------------------------- ---------------- ----------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS:
Robert F. Spoerry................................................................ 34,551 1.4%
Fred Ort......................................................................... 6,076 *
Karl M. Lang..................................................................... 6,076 *
Lukas Braunschweiler............................................................. 6,076 *
John D. Robechek................................................................. 5,214 *
Thomas P. Salice(2).............................................................. 38,808 1.6%
Alan W. Wilkinson(2)............................................................. 38,808 1.6%
All directors and executive officers as a group (9 persons)...................... 146,387 6.0%
</TABLE>
- ------------------
* Less than 1%.
(1) No director or executive officer owns any of the voting capital
stock of MT Investors. AEA Investors owns 49.0% of the voting
capital stock of MT Investors.
(2) Includes shares held by, or in trust for, members of such
individual's family. Does not include shares held by AEA Investors,
of which Messrs. Salice and Wilkinson are officers.
57
<PAGE>
DESCRIPTION OF CREDIT AGREEMENT
To provide a portion of the financing required for the Acquisition and for
working capital and for general corporate purposes thereafter, the Issuer and
Swiss Subholding intend to enter into the Credit Agreement with Merrill Lynch
Capital Corporation ('Merrill Lynch Capital'), as Arranger and Documentation
Agent, The Bank of Nova Scotia, as Administrative Agent, Lehman Commercial Paper
Inc. and Credit Suisse, as Co-Agents and the other financial institutions party
thereto. The following summary of the Credit Agreement does not purport to be
complete and is qualified in its entirety by reference to the Credit Agreement,
a copy of which will be filed as an exhibit to the Registration Statement of
which this Prospectus is a part. AEA Investors and Merrill Lynch Capital have
entered into a commitment letter with respect to the Credit Agreement.
Loans under the Credit Agreement are expected to consist of: (i) Term A
Loans to be borrowed by Swiss Subholding in an aggregate principal amount of
$100 million, which will be available in up to two subfacilities denominated in
U.S. dollars, German marks, Swiss francs, French francs, or British pounds
sterling, (ii) Term B Loans to be borrowed by the Issuer in an aggregate
principal amount of $75 million, (iii) Term C(CH) Loans to be borrowed by Swiss
Subholding in an aggregate principal amount of $40 million, (iv) Term C(US)
Loans to be borrowed by the Issuer in an aggregate principal amount of $40
million, (v) Term D Loans to be borrowed by the Issuer in an aggregate principal
amount of $20 million (the Term A Loans, the Term B Loans, the Term C(CH) Loans,
the Term C(US) Loans and the Term D Loans are referred to collectively as the
'Term Loans'), and (vi) a multi-currency revolving credit facility that may be
borrowed by either the Issuer or Swiss Subholding in an aggregate principal
amount of $140 million, and which will include letter of credit and swingline
subfacilities also available to certain Subsidiaries (the 'Revolving Facility'
and together with the Term Loans, the 'Credit Facilities').
Loans under the Revolving Facility may be repaid and reborrowed. The Issuer
and Swiss Subholding will be required to pay a facility fee equal to 0.50% per
annum on the amount of the Revolving Facility and letter of credit fees on the
aggregate face amount of letters of credit under the Revolving Facility at the
then Applicable Margin for LIBOR Rate Revolving Facility loans (as set forth
below under '--Interest Rates').
INTEREST RATES
Borrowings under the Credit Facilities will bear interest at a floating
rate based on either (at the borrower's option) (x) fixed interest periods of
one, two, three, six or, if available, 12 months at the applicable LIBOR Rate
(defined as the rate at which deposits in the applicable currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, are offered to major banks in the London eurocurrency market) or (y)
the Alternate Base Rate ('ABR') (defined as the higher of the published base
rate and the Federal Funds Rate plus 0.50%). Borrowings will bear interest at
either the LIBOR Rate or the ABR plus the following 'Applicable Margin': (A)
with respect to LIBOR Rate loans, (i) in the case of the Revolving Facility
Loans, 2.00%; (ii) in the case of the Term A Loans, 2.50%; (iii) in the case of
the Term B Loans, 3.00%; (iv) in the case of the Term C(CH) and C(US) Loans,
3.25%; and (v) in the case of the Term D Loans, 3.50%; and (B) with respect to
ABR loans, (i) in the case of the Revolving Facility Loans, 1.00%; (ii) in the
case of the Term A Loans, 1.50%; (iii) in the case of the Term B Loans, 2.00%;
(iv) in the case of the Term C(CH) and C(US) Loans, 2.25%; and (v) in the case
of the Term D Loans, 2.50%. However, after such time as consolidated financial
results of the Issuer for four fiscal quarters after the Closing are available,
the Applicable Margin for the Revolving Facility and the Term A Loans may be
reduced based on the ratio of total consolidated debt of the Company to its
trailing 12-month consolidated EBITDA.
MATURITY, AMORTIZATION AND MANDATORY PREPAYMENTS
The Term A Loans and the Revolving Facility mature on December 31, 2002,
the Term B Loans mature on December 31, 2003, the Term C(CH) and C(US) Loans
mature on December 31, 2004 and the Term D Loans mature on June 30, 2005.
Amounts outstanding under the Term Loans will amortize in quarterly installments
beginning March 31, 1997.
The Term Loans will be subject to mandatory prepayments (to be applied pro
rata among the Term Loans) in an amount equal to, subject to certain exceptions,
(i) 75% of annual Excess Cash Flow (as defined in the Credit
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Agreement), (ii) the net proceeds received from certain sales of assets, (iii)
the net proceeds from the issuance of debt, and (iv) 50% of the net proceeds
from the issuance of equity.
SECURITY AND GUARANTEES
The obligations of Swiss Subholding under the Credit Agreement will be (i)
secured by a first priority security interest in all of the material assets of
Swiss Subholding, (ii) guaranteed, to the extent permitted by applicable law by
all of the direct and indirect subsidiaries of Swiss Subholding, with certain
exceptions, and each such guarantee will, to the extent permitted by applicable
law and with certain exceptions, be secured by a first priority security
interest in all of the material assets of each such guarantor, and (iii)
guaranteed by the Issuer, its direct and indirect U.S. subsidiaries and Holding,
and each such guarantee will be secured by a first priority security interest in
all of the material assets of each such guarantor, except that each such
guarantor will pledge only 65% of the stock of any non-U.S. subsidiary held by
it. The obligations of the Issuer under the Credit Agreement will be (i) secured
by a first priority security interest in all of the material assets of the
Issuer, except that the Issuer will pledge only 65% of the stock of each
non-U.S. subsidiary held by it, (ii) guaranteed by each direct and indirect U.S.
subsidiary of the Issuer, and each such guarantee will be secured by a first
priority security interest in all of the material assets of each such guarantor,
and (iii) guaranteed by Holding, and such guarantee will be secured by a first
priority security interest in all of the stock of the Issuer held by Holding.
COVENANTS AND EVENTS OF DEFAULT
The Credit Agreement will contain covenants that, among other things, limit
the Issuer's and its subsidiaries' ability to incur liens; merge, consolidate or
dispose of assets; make loans and investments; incur indebtedness; engage in
certain transactions with affiliates; incur certain contingent obligations; pay
dividends and other distributions; prepay the Notes; or make capital
expenditures. The Credit Agreement will also require the Company to maintain a
minimum net worth and a minimum fixed charge coverage ratio, and to maintain a
ratio of total debt to EBITDA below a specified maximum.
The Credit Agreement will contain customary events of default, including,
without limitation, nonpayment of principal, interest, fees or other amounts
when due; violation of covenants; breach of any representation or warranty;
cross-default and cross-acceleration; Change in Control (as defined in the
Credit Agreement); bankruptcy events; material judgments; certain ERISA matters;
and invalidity of loan documents or security interests.
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DESCRIPTION OF NOTES
The Notes will be issued under the Indenture, to be dated as of the Issue
Date, among MT Acquisition Corp., as issuer, Holding, as guarantor, and United
States Trust Company of New York, as trustee (the 'Trustee'). Upon consummation
of the Merger of MT Acquisition Corp. with Mettler-Toledo, Inc., Mettler-Toledo,
Inc. will assume by supplemental indenture all of the obligations of MT
Acquisition Corp. under the Indenture and the Notes. A copy of the form of the
Indenture is filed as an exhibit to the Registration Statement of which this
Prospectus is part. The following summary of certain provisions of the Indenture
and the Notes summarizes the material terms thereof but does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all provisions of the Indenture, including the definitions of certain terms
contained therein and those terms made part of the Indenture by reference to the
TIA. The term 'Issuer' and other capitalized terms used herein and not otherwise
defined have the meanings set forth under '--Certain Definitions' below.
GENERAL
The Notes will be unsecured senior subordinated obligations of the Issuer,
limited to $115 million aggregate principal amount. The Notes will be issued
only in registered form without coupons, in denominations of $1,000 and integral
multiples thereof. Principal of, and premium, if any, and interest on, the Notes
will be payable, and the Notes will be transferable, at the corporate trust
office or agency of the Trustee in The City of New York maintained for such
purposes at 770 Broadway, New York, New York 10003. No service charge will be
made for any transfer, exchange or redemption of Notes, except in certain
circumstances for any tax or other governmental charge that may be imposed in
connection therewith. Upon issuance, the Notes will be represented by one or
more global notes (the 'Global Notes') that will be deposited with, or on behalf
of, The Depository Trust Company, as depositary (the 'Depositary'), and
registered in the name of a nominee of the Depositary. Payments in respect of
the Global Notes will be made by the Issuer to the Depositary in immediately
available funds. See '--Book-Entry; Delivery and Form.'
MATURITY, INTEREST AND PRINCIPAL PAYMENTS
The Notes will mature on , 2006. Each Note will bear interest
at the applicable rate set forth on the cover page of this Prospectus from
, 1996, or from the most recent date to which interest has been
paid, payable in cash semiannually in arrears to Holders of record at the close
of business on the or immediately preceding the interest
payment date on and of each year, commencing
, 1997. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
SINKING FUND
The Notes will not be entitled to the benefit of any sinking fund.
OPTIONAL REDEMPTION
Optional Redemption. The Notes will be redeemable at the option of the
Issuer, in whole or in part, at any time on or after , 2001, and prior
to maturity, at the following redemption prices (expressed as percentages of
principal amount), plus accrued interest, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period beginning on of the years set forth below:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
- ----------------------- ----------------
<S> <C>
2001................... %
2002................... %
2003................... %
2004 and thereafter.... 100.0%
</TABLE>
In addition, at any time and from time to time on or prior to , 1999
(three years plus 60 days), the Issuer may redeem in the aggregate up to $40
million of the original principal amount of the Notes with the proceeds of one
or more Public Equity Offerings, in each case which yields gross proceeds to the
Issuer (before discounts, commissions and expenses) of at least $65 million and
following which there is a Public Market, at a
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redemption price (expressed as a percentage of the principal amount thereof)
of %, plus accrued interest, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date), provided that at least $75 million in
aggregate principal amount of the Notes must remain outstanding after such
redemption. Such redemption must be made within 60 days of the date of the
closing of any such Public Equity Offering.
Selection and Notice. In the case of any partial redemption, selection of
Notes for redemption will be made by the Trustee on a pro rata basis, by lot or
by such other method as the Trustee shall deem fair and appropriate, although no
Note of $1,000 in original principal amount or less will be redeemed in part.
Notice of redemption shall be mailed by first-class mail at least 30 but not
more than 60 days before the redemption date to each Holder of Notes to be
redeemed at its registered address. On and after the redemption date, interest
will cease to accrue on Notes or portions thereof called for redemption and
accepted for payment.
NOTE GUARANTEES
Holding will, and certain future subsidiaries of the Issuer as described
below may, as primary obligors and not merely as sureties, fully, irrevocably
and unconditionally guarantee (each, a 'Note Guarantee'), on an unsecured,
senior subordinated basis to the same extent as the Notes are subordinated to
Senior Indebtedness, the performance and punctual payment when due, whether at
Stated Maturity, by acceleration or otherwise, of all obligations of the Issuer
under the Indenture and the Notes, whether for payment of principal of or
premium, if any, or interest on the Notes, expenses, indemnification or
otherwise. Such Note Guarantors will agree to pay, in addition to the amount
stated above, any and all expenses (including reasonable counsel fees and
expenses) incurred by the Trustee or the Holders in enforcing any rights under
any Note Guarantee. Each Note Guarantee will be limited to an amount not to
exceed the maximum amount that can be Guaranteed by the applicable Note
Guarantor without rendering such Note Guarantee, as it relates to such Note
Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally.
After the Issue Date the Issuer will cause (x) certain U.S. Restricted
Subsidiaries, as provided in the covenant described in 'Certain
Covenants--Restriction on Transfer of Assets to Subsidiaries,' and (y) each U.S.
Restricted Subsidiary that Incurs Indebtedness (other than Specified U.S.
Subsidiary Indebtedness), to execute and deliver to the Trustee a supplemental
indenture pursuant to which such Restricted Subsidiary will Guarantee payment of
the Notes. See '--Certain Covenants--Certain Future Note Guarantors' and
'--Restriction on Transfer of Assets to Subsidiaries' below.
Each Note Guarantee is a continuing guarantee and shall (a) remain in full
force and effect until payment in full of all the obligations of the Issuer
under the Notes and the Indenture, (b) be binding upon each Note Guarantor and
(c) inure to the benefit of and be enforceable by the Trustee, the Noteholders
and their successors, transferees and assigns.
RANKING; SUBORDINATION
The indebtedness evidenced by the Notes will be unsecured Senior
Subordinated Indebtedness of the Issuer, will be subordinated in right of
payment, as set forth in the Indenture, to all existing and future Senior
Indebtedness of the Issuer, will rank pari passu in right of payment with all
Senior Subordinated Indebtedness, if any, of the Issuer and will be senior in
right of payment to all Subordinated Indebtedness, if any, of the Issuer. The
Notes will also be effectively subordinated to any Secured Indebtedness of the
Issuer to the extent of the value of the assets securing such Indebtedness, and
to all Indebtedness of the Issuer's Subsidiaries.
At June 30, 1996, on a pro forma basis after giving effect to the
consummation of the Acquisition, including the issuance and sale of the Notes,
the aggregate amount of outstanding Senior Indebtedness of the Issuer and
outstanding Indebtedness of the Issuer's Subsidiaries that would have
effectively ranked senior to the Notes would have been $330.8 million. Although
the Indenture contains limitations on the amount of additional Indebtedness that
the Issuer and its Subsidiaries may Incur, under certain circumstances the
amount of such Indebtedness could be substantial and, in any case, such
Indebtedness may be Senior Indebtedness or Secured Indebtedness. See '--Certain
Covenants--Limitation on Indebtedness.'
The Indenture will provide that in the event of any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding in connection therewith, relating to
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the Issuer or any Note Guarantor (individually an 'Obligor' and, collectively,
the 'Obligors') or its assets, or any liquidation, dissolution or other
winding-up of any Obligor, whether voluntary or involuntary, or any assignment
for the benefit of creditors or other marshalling of assets or liabilities of
any Obligor, all Senior Indebtedness or Guarantor Senior Indebtedness, as
applicable, of such Obligor must be paid in full in cash or cash equivalents, or
such payment duly provided for to the satisfaction of holders of Senior
Indebtedness or Guarantor Senior Indebtedness, before any payment or
distribution, whether in cash, property or securities (excluding certain
permitted equity or junior debt securities of an Obligor), is made, directly or
indirectly on account of the Senior Subordinated Note Obligations or for the
acquisition of any of the Notes.
During the continuance of any default in the payment when due (whether at
stated maturity, by acceleration or otherwise) of principal, premium, if any, or
interest on, or of unreimbursed amounts under drawn letters of credit or fees
relating to letters of credit constituting, any Senior Indebtedness or Guarantor
Senior Indebtedness, as applicable, of an Obligor (in either case, a 'Payment
Default'), no direct or indirect payment by or on behalf of such Obligor of any
kind or character shall be made on account of the Senior Subordinated Note
Obligations of such Obligor or for the acquisition of any of the Notes unless
and until such default has been cured or waived or has ceased to exist or such
Senior Indebtedness or Guarantor Senior Indebtedness, as applicable, has been
discharged or paid in full in cash or cash equivalents.
In addition, during the continuance of any other default with respect to
any Designated Senior Indebtedness of an Obligor pursuant to which the maturity
thereof may be accelerated (a 'Non-payment Default'), after receipt by the
Trustee and the Issuer from an agent or other representative of holders of such
Designated Senior Indebtedness of a written notice of such Non-payment Default
specifying, among other things, the applicable Designated Senior Indebtedness
and Obligor to which such Non-payment Default relates, no direct or indirect
payment of any kind or character may be made by such Obligor on account of the
Senior Subordinated Note Obligations or for the acquisition of any of the Notes
for the period specified below (the 'Payment Blockage Period').
The Payment Blockage Period shall commence upon the receipt of notice of a
Non-payment Default by the Trustee and the Issuer from an agent or other
representative of holders of Designated Senior Indebtedness stating that such
notice is a payment blockage notice pursuant to the Indenture and shall end on
the earliest to occur of the following events: (i) 179 days shall have elapsed
since the receipt of such notice; (ii) the date on which such default is cured
or waived or ceases to exist (provided that no other Payment Default or
Non-payment Default has occurred or is then continuing after giving effect to
such cure or waiver); (iii) the date on which such Designated Senior
Indebtedness is discharged or paid in full in cash or cash equivalents; or (iv)
the date on which such Payment Blockage Period shall have been terminated by
express written notice to the Issuer and/or the applicable Note Guarantors, as
the case may be, or the Trustee from the agent or other representative of
holders of Designated Senior Indebtedness initiating such Payment Blockage
Period, after which the Issuer and the Note Guarantors, subject to the existence
of any Payment Default, shall promptly resume making any and all required
payments in respect of the Notes and the Note Guarantees, as applicable,
including any missed payments. Only one Payment Blockage Period, whether with
respect to the Notes, any Note Guarantee or the Notes and Note Guarantees
collectively, may be commenced within any 360 consecutive day period. No
Non-payment Default with respect to Designated Senior Indebtedness that existed
or was continuing on the date of the commencement of any Payment Blockage Period
with respect to the Designated Senior Indebtedness initiating such Payment
Blockage Period (other than any such Non-payment Default which was not and could
not reasonably be expected to have been known by the holders or the agent or
other representative of such Designated Senior Indebtedness) will be, or can be,
made the basis for the commencement of a second Payment Blockage Period, whether
or not within a period of 360 consecutive days, unless such default has been
cured or waived for a period of not less than 90 consecutive days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such Payment
Blockage Period, that, in either case, would give rise to a Non-payment Default
pursuant to any provision under which a Non-payment Default previously existed
or was continuing shall constitute a new Non-payment Default for this purpose;
provided that, in the case of a breach of a particular financial covenant, the
applicable Obligor shall have been in compliance for at least one full period
commencing after the date of commencement of such Payment Blockage Period). In
no event will a Payment Blockage Period extend beyond 179 days from the date of
the receipt by the Trustee of the notice and there must be a 181 consecutive day
period in any 360 day period during which no Payment Blockage Period is in
effect.
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If the Issuer fails to make any payment on the Notes when due or within any
applicable grace period, whether or not on account of the payment blockage
provisions referred to above, such failure would constitute an Event of Default
under the Indenture and would enable the holders of the Notes to accelerate the
maturity thereof. See '--Defaults.'
If any Obligor shall make any payment to the Trustee on account of the
principal of, or premium, if any, or interest on, the Notes, or any other Senior
Subordinated Note Obligations, or the holders of the Notes shall receive from
any source any payment on account of the principal of, or premium, if any, or
interest on, the Notes or any other Senior Subordinated Note Obligations, at a
time when such payment is prohibited by the subordination provisions of the
Indenture, the Trustee or such holders shall hold such payment in trust for the
benefit of, and shall pay over and deliver to, the holders of Senior
Indebtedness or Guarantor Senior Indebtedness, as applicable (pro rata as to
each of such holders on the basis of the respective amounts of such Senior
Indebtedness or Guarantor Senior Indebtedness, as applicable, held by them), or
their representative or the trustee under the indenture or other agreement (if
any) pursuant to which such Senior Indebtedness or Guarantor Senior
Indebtedness, as applicable, may have been issued, as their respective interests
may appear, for application to the payment of all outstanding Senior
Indebtedness or Guarantor Senior Indebtedness, as applicable, until all such
Senior Indebtedness or Guarantor Senior Indebtedness, as applicable, has been
paid in full in cash, after giving effect to all other payments or distributions
to, or provisions made for, the holders of Senior Indebtedness or Guarantor
Senior Indebtedness, as applicable.
By reason of such subordination, in the event of liquidation, receivership,
reorganization or insolvency, creditors of an Obligor who are holders of Senior
Indebtedness or Guarantor Senior Indebtedness may recover more, ratably, than
the holders of the Notes, and funds which would be otherwise payable to the
holders of the Notes will be paid to the holders of the Senior Indebtedness to
the extent necessary to pay the Senior Indebtedness in full, and the Issuer may
be unable to meet its obligations in full with respect to the Notes. In
addition, as described above, the Senior Subordinated Note Obligations will be
effectively subordinate to the claims of creditors of the Issuer's subsidiaries
(other than subsidiaries that are or hereafter become Note Guarantors).
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Noteholder will have the
right to require the Issuer to purchase all or any part of such Holder's Notes
at a purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date of purchase pursuant to the
offer described below and the other procedures set forth in the Indenture. See
'--Certain Covenants--Change of Control.'
The occurrence of certain of the events that would constitute a Change of
Control would constitute a default under the Credit Agreement and might
constitute a default under other Indebtedness of the Issuer and its
Subsidiaries. In addition, the exercise by the Holders of their right to require
the Issuer to repurchase the Notes could cause a default under the Credit
Agreement or such Indebtedness even if the Change of Control itself does not,
due to the financial effect of such repurchase on the Issuer. Finally, the
Issuer's ability to pay cash to the Holders upon a repurchase may be limited by
the Issuer's then existing financial resources. There can be no assurance that
sufficient funds will be available when necessary to make any required
repurchases.
CERTAIN COVENANTS
The Indenture will contain the following covenants, among others:
Limitation on Indebtedness. (a) The Issuer will not, and will not permit
any Restricted Subsidiary to, Incur any Indebtedness (including Acquired
Indebtedness), unless such Incurrence is by the Issuer, and on the date of such
Incurrence the Consolidated Coverage Ratio would be greater than 2.0:1.0, if
such Indebtedness is Incurred on or prior to December 31, 1998 and 2.25:1.0 if
such Indebtedness is Incurred thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Issuer and, to the
extent specifically set forth below, its Restricted Subsidiaries may Incur the
following Indebtedness:
(i) Indebtedness of the Issuer or Swiss Subholding under the Credit
Agreement in an aggregate principal amount at any time outstanding not to
exceed (x) an amount of term loan borrowings thereunder equal to (1) the
aggregate principal amount of term loan borrowings by the Issuer or Swiss
Subholding outstanding under the Credit Agreement on the Issue Date minus
(2) the aggregate amount of all scheduled
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repayments and mandatory repayments of term loan borrowings thereunder,
whether or not actually made (unless any such repayment is waived or the
relevant provision requiring any such repayment is amended by the lenders
thereunder in accordance therewith), and all other repayments of term loan
borrowings actually made thereunder (other than to the extent refinanced by
an equal principal amount of Indebtedness Incurred under this clause (i))
plus (3) if such term loan borrowings are refinanced pursuant to this
clause (i), an amount of Refinancing Costs paid in connection with such
refinancing, plus (y) $140 million of revolving credit borrowings
thereunder (minus the aggregate amount of Indebtedness of Non-U.S.
Restricted Subsidiaries Incurred pursuant to clause (xvii) of this
paragraph (b)), provided that
(A) the aggregate principal amount of term loan borrowings by Swiss
Subholding outstanding under the Credit Agreement at any time
outstanding shall not exceed an amount equal to (x) the aggregate
principal amount of term loan borrowings by Swiss Subholding
outstanding under the Credit Agreement on the Issue Date plus (y)
if such term loan borrowings are refinanced pursuant to this
clause (i), an amount of Refinancing Costs paid in connection with
such refinancing,
(B) any Indebtedness Incurred by Swiss Subholding to renew, extend,
substitute for, refinance or replace (each, for purposes of this
clause (i), to 'refinance') any Indebtedness under the Credit
Agreement shall be Incurred only in a transaction exempt from
registration requirements under United States securities laws, and
not pursuant to a public offering in the United States, and shall
not be so registered for resale in a public offering in the United
States, and
(C) for purposes of determining the outstanding principal amount of
term loan Indebtedness under this clause (i), the aggregate
principal amount of term loan Indebtedness that is Incurred (x) to
refinance term loan Indebtedness under the Credit Agreement and
(y) in a different currency from the Indebtedness being
refinanced, shall be calculated based on the relevant currency
exchange rate in effect on the date of such refinancing;
(ii) Indebtedness of the Issuer pursuant to the Notes, Indebtedness of
any Note Guarantor pursuant to its Note Guarantee, and Indebtedness of any
other Restricted Subsidiary with respect to the Notes arising by reason of
any Lien granted by such Subsidiary to secure the Notes;
(iii) Indebtedness of the Issuer or any Restricted Subsidiary
outstanding on the Issue Date (other than Indebtedness under or in respect
of the Credit Agreement);
(iv) Indebtedness of the Issuer owing to and held by any Restricted
Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by
the Issuer or any Restricted Subsidiary; provided, however, that (x) any
such Indebtedness is made pursuant to an intercompany note, (y) any such
Indebtedness of the Issuer or any Note Guarantor is Subordinated
Indebtedness that is subordinated to the Notes or to the applicable Note
Guarantee as provided in such intercompany note, and in any event at least
to the same extent as the Notes are subordinated to Senior Indebtedness,
and (z) any subsequent transfer of any such Indebtedness (except to the
Issuer or a Restricted Subsidiary) will be deemed, in each case, to
constitute the Incurrence of such Indebtedness by the issuer thereof;
(v) Acquisition Indebtedness of any Non-U.S. Restricted Subsidiary
Incurred after the Issue Date (and not for the purpose of financing the
Acquisition), provided that (x) at the time of such Incurrence and after
giving effect thereto on a pro forma basis, (A) no Default or Event of
Default will have occurred and be continuing or would result therefrom and
(B) the Issuer could Incur $1.00 of additional Indebtedness pursuant to
paragraph (a) above and (y) such Indebtedness (unless Incurred by a Note
Guarantor) shall be Incurred only in a transaction exempt from registration
requirements under United States securities laws, and not pursuant to a
public offering in the United States, and shall not be so registered for
resale in a public offering in the United States;
(vi) Acquired Indebtedness of any Restricted Subsidiary, provided that
at the time of such Incurrence and after giving effect thereto on a pro
forma basis, (x) no Default or Event of Default will have occurred and be
continuing or would result therefrom and (y) the Issuer could Incur $1.00
of additional Indebtedness pursuant to paragraph (a) above;
(vii) Indebtedness of any Restricted Subsidiary that is a Note
Guarantor, provided that at the time of such Incurrence and after giving
effect thereto on a pro forma basis, (x) no Default or Event of Default
will have occurred and be continuing or would result therefrom and (y) the
Issuer could Incur $1.00 of additional Indebtedness pursuant to paragraph
(a) above;
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(viii) obligations of the Issuer or any Restricted Subsidiary entered
into in the ordinary course of business (A) under Interest Rate Agreements
designed to protect such Person against fluctuations in interest rates in
respect of Indebtedness of such Person permitted to be incurred under the
Indenture, which obligations do not exceed the aggregate principal amount
of such Indebtedness, and (B) under Currency Agreements designed to protect
such Person against fluctuations in foreign currency exchange rates in
respect of foreign exchange exposures incurred by such person;
(ix) obligations of the Issuer or any Restricted Subsidiary in respect
of (A) judgment, performance, surety and other bonds provided by such
Person with respect to obligations of such Person in the ordinary course of
business, and (B)(x) letters of credit securing obligations incurred in the
ordinary course of business or (y) other letters of credit in an amount not
to exceed $5 million in the aggregate outstanding at any time;
(x) Indebtedness of the Issuer or any Restricted Subsidiary arising
from the honoring of a check, draft or similar instrument of such Person
drawn against insufficient funds, provided that such Indebtedness is
extinguished within five Business Days of its incurrence;
(xi) (A) Indebtedness of the Issuer or any Restricted Subsidiary
consisting of Capitalized Lease Obligations, Purchase Money Obligations or
Capital Expenditure Indebtedness (including refinancings thereof), in an
aggregate principal amount outstanding at any time for all such
Indebtedness not exceeding 5% of Consolidated Assets, and (B) other Capital
Expenditure Indebtedness of any Non-U.S. Restricted Subsidiary so long as
at the time of Incurrence thereof and after giving effect thereto on a pro
forma basis, (x) no Default or Event of Default will have occurred and be
continuing or would result therefrom and (y) the Issuer could Incur $1.00
of additional Indebtedness pursuant to paragraph (a) above; provided that
any Indebtedness described in this clause (xi) Incurred by a Restricted
Subsidiary (other than a Note Guarantor) shall be Incurred only in a
transaction exempt from registration requirements under United States
securities laws, and not pursuant to a public offering in the United
States, and shall not be so registered for resale in a public offering in
the United States;
(xii) Indebtedness of the Issuer or any Restricted Subsidiary that is
a Note Guarantor (other than Indebtedness permitted to be Incurred pursuant
to paragraph (a) above or any other clause of this paragraph (b)) not to
exceed $10 million in aggregate principal amount outstanding at any given
time for all such Indebtedness;
(xiii) Indebtedness of any Non-U.S. Restricted Subsidiary (other than
Indebtedness permitted to be Incurred pursuant to any other clause of this
paragraph (b)) not to exceed $25 million in aggregate principal amount
outstanding at any given time for all such Indebtedness;
(xiv) Indebtedness of the Issuer or any Restricted Subsidiary
consisting of guarantees, indemnities or obligations in respect of purchase
price adjustments, in connection with the disposition of assets permitted
under the Indenture, in a principal amount not to exceed the gross proceeds
actually received by the Issuer or any Restricted Subsidiary in connection
with such disposition;
(xv) (1) Guarantees of the Issuer or any Restricted Subsidiary of
Specified Senior Indebtedness that is otherwise permitted to be Incurred in
accordance with this covenant, (2) Permitted Guarantees and (3) Guarantees
of the Issuer or any Restricted Subsidiary (x) of Specified Indebtedness
that is otherwise permitted to be Incurred in accordance with this covenant
and (y) that are permitted to be Incurred in accordance with the covenant
described in '--Limitation on Certain Guarantees';
(xvi) Indebtedness of the Issuer or any Restricted Subsidiary (A) with
respect to any Specified Senior Indebtedness that is otherwise permitted to
be Incurred in accordance with this covenant, to the extent arising by
reason of any Lien granted by such Person to secure such Specified Senior
Indebtedness, (B) with respect to any Pari Passu Indebtedness that is
otherwise permitted to be Incurred in accordance with this covenant, to the
extent arising by reason of any Permitted Lien granted by such Person to
secure such Pari Passu Indebtedness, or (C) with respect to any Specified
Indebtedness that is otherwise permitted to be Incurred in accordance with
this covenant, to the extent arising by reason of any Lien granted by such
Person to secure such Specified Indebtedness in accordance with the
covenant described in '--Limitation on Certain Liens';
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(xvii) Indebtedness of any Non-U.S. Restricted Subsidiary to the
extent that the amount of such Indebtedness would be permitted as revolving
credit borrowing under the Credit Agreement, provided that the aggregate
amount of such Indebtedness shall reduce the amount of revolving credit
borrowings permitted to be Incurred under the Credit Agreement for purposes
of clause (i)(y) of this paragraph (b); and
(xviii) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause (xviii), a 'refinancing')
of any Indebtedness described in paragraph (a) or clause (ii), (iii), (v),
(vi), (vii) or (xi)(B) of this paragraph (b), including any successive
refinancings, so long as (A) any such new Indebtedness shall be in
principal amount that does not exceed the principal amount (or, if such
Indebtedness being refinanced provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination)
so refinanced plus the lesser of (I) the stated amount of any premium or
other payment required to be paid in connection with such a refinancing
pursuant to the terms of the Indebtedness being refinanced and (II) the
amount of premium or other payment actually paid at such time to refinance
the Indebtedness, plus, in either case, the amount of expenses of the
Issuer or a Restricted Subsidiary incurred in connection with such
refinancing; (B) in the case of any refinancing of Pari Passu Indebtedness
or Subordinated Indebtedness, such new Indebtedness is made pari passu with
or subordinate in right of payment to the Notes and the Note Guarantees, as
applicable, at least to the same extent as the Indebtedness being
refinanced; (C) such new Indebtedness has an Average Life equal to or
longer than the Average Life of the Indebtedness being refinanced and a
final Stated Maturity the same as or later than the final Stated Maturity
of the Indebtedness being refinanced; and (D) in the case of any
refinancing of Indebtedness described in clause (v), (vi) or (xi)(B) of
this paragraph (b), such new Indebtedness shall be Incurred (other than by
a Note Guarantor) only in a transaction exempt from registration
requirements under United States securities laws, and not pursuant to a
public offering in the United States, and shall not be so registered for
resale in a public offering in the United States, provided, that this
clause (D) shall not apply in respect of clause (vi) to the extent that the
Acquired Indebtedness being refinanced was Incurred in such a registered
transaction or public offering so long as the obligor in respect of such
Indebtedness does not change as a result of such refinancing.
(c) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this covenant, (i) Indebtedness Incurred pursuant to the Credit
Agreement on the Issue Date shall be treated as Incurred pursuant to clause (i)
of the foregoing paragraph (b), (ii) any other obligation of the obligor on such
Indebtedness arising under any Guarantee, Lien or letter of credit supporting
such Indebtedness shall be disregarded to the extent that such Guarantee, Lien
or letter of credit secures the principal amount of such Indebtedness; (iii) in
the event that Indebtedness meets the criteria of more than one of the types of
Indebtedness described in paragraph (b), subject to clause (i) of this paragraph
(c), the Issuer, in its sole discretion, shall classify such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses; and (iv) the amount of Indebtedness issued
at a price that is less than the principal amount thereof shall be equal to the
amount of the liability in respect thereof determined in accordance with GAAP.
(d) For purposes of determining compliance with any Dollar-denominated
restriction on the Incurrence of Non-Dollar Indebtedness under clause
(ix)(B)(y), (xi)(A), (xii) or (xiii) of paragraph (b) above, the Dollar-
equivalent principal amount of such Indebtedness Incurred pursuant thereto shall
be calculated based on the relevant currency exchange rate in effect on the date
that such Indebtedness was Incurred, in the case of term debt, or first
committed, in the case of revolving credit debt, provided that (x) the
Dollar-equivalent principal amount of any such Indebtedness outstanding on the
Issue Date shall be calculated based on the relevant currency exchange rate in
effect on the Issue Date and (y) if such Indebtedness is Incurred to refinance
Non-Dollar Indebtedness previously Incurred pursuant to clause (ix)(B)(y),
(xi)(A), (xii) or (xiii) of paragraph (b) above, and such refinancing would
cause the Dollar-denominated restriction under such respective clause to be
exceeded if calculated at the relevant currency exchange rate in effect on the
date of such refinancing, such Dollar-denominated restriction shall be deemed
not to have been exceeded so long as the principal amount of such refinancing
Indebtedness does not exceed the principal amount of such Indebtedness being
refinanced, but the ability to make subsequent Incurrences of Indebtedness
subject to the Dollar-denominated restriction under such respective clause shall
be determined as if the relevant currency exchange rate applied to any such
previous refinancing was the rate in effect on the date of such refinancing. The
principal amount of any such refinancing
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Indebtedness, if Incurred in a different currency from the Indebtedness being
refinanced, shall be calculated based on the currency exchange rate applicable
to the currencies in which such respective Indebtedness is denominated that is
in effect on the date of such refinancing.
Limitation on Restricted Payments. (a) The Issuer will not, and will not
permit any Restricted Subsidiary to, directly or indirectly,:
(i) declare or pay any dividend or make any other distribution or payment
on or in respect of Capital Stock of the Issuer (including any payment in
connection with any merger or consolidation involving the Issuer or any
Restricted Subsidiary), or any other payment to the direct or indirect holders
of Capital Stock of the Issuer in their capacity as such, except dividends or
distributions payable solely in Capital Stock of the Issuer (other than
Redeemable Capital Stock);
(ii) declare or pay any dividend or make any other distribution or payment
on or in respect of Capital Stock of any Restricted Subsidiary (including any
payment in connection with any merger or consolidation involving the Issuer or
any Restricted Subsidiary), or any other payment to the direct or indirect
holders of Capital Stock of any Restricted Subsidiary in their capacity as such,
except dividends or distributions payable (x) on a pro rata basis to all such
holders of such Capital Stock, whether in Capital Stock of such Restricted
Subsidiary or otherwise, or (y) to the Issuer or any Restricted Subsidiary;
(iii) purchase, redeem, defease or otherwise acquire or retire for value
any Capital Stock of the Issuer or any Restricted Subsidiary held by Persons
other than the Issuer or a Restricted Subsidiary, except from all holders of
such Capital Stock of a Restricted Subsidiary on a pro rata basis;
(iv) make any principal payment on, or purchase, defease, repurchase,
redeem or otherwise acquire or retire for value, prior to any scheduled
maturity, scheduled repayment, scheduled sinking fund payment or other Stated
Maturity, any Subordinated Indebtedness of the Issuer or any Note Guarantor
(other than in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
such acquisition or retirement); or
(v) make any Investment (other than any Permitted Investment) in any
Person (any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Investment being herein referred to
as a 'Restricted Payment') if at the time of and after giving effect to such
Restricted Payment on a pro forma basis, (1) a Default or Event of Default will
have occurred and be continuing or would result therefrom; (2) the Issuer could
not Incur at least $1.00 of additional Indebtedness under paragraph (a) of the
covenant described in '--Limitation on Indebtedness'; or (3) the aggregate
amount of such Restricted Payment and all other Restricted Payments declared or
made from and after the Issue Date would exceed, without duplication, the sum
of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from October 1, 1996 to the end of the
most recent fiscal quarter ending prior to the date of such Restricted
Payment for which consolidated financial statements of the Issuer are
available (or, if such Consolidated Net Income for such period will be a
deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by the Issuer either (x)
as capital contributions in the form of common equity to the Issuer after
the Issue Date or (y) from the issuance or sale of Capital Stock (other
than Redeemable Capital Stock) of the Issuer after the Issue Date, other
than to a Subsidiary of the Issuer;
(C) the amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from (i) payments of dividends,
repayments of the principal of loans or advances or other transfers of
assets to the Issuer or any Restricted Subsidiary from any Unrestricted
Subsidiary or (ii) the redesignation of Unrestricted Subsidiaries as
Restricted Subsidiaries (valued in each case as provided in the definition
of 'Investment'), not to exceed in the case of any such Unrestricted
Subsidiary the aggregate amount of Investments (other than Permitted
Investments) made by the Issuer or any Restricted Subsidiary in such
Unrestricted Subsidiary after the Issue Date;
(D) in the case of disposition or repayment of any Investment
constituting a Restricted Payment made after the Issue Date, an amount
equal to the lesser of the return of capital with respect to such
Investment
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and the initial amount of such Investment, in either case, less the cost of
the disposition of such Investment; and
(E) the aggregate net cash proceeds received after the Issue Date by
the Issuer or any Restricted Subsidiary from the issuance or sale (other
than to any Restricted Subsidiary) of debt securities or Redeemable Capital
Stock that have been converted into or exchanged for Capital Stock of the
Issuer (other than Redeemable Capital Stock) to the extent such debt
securities or Redeemable Capital Stock were originally sold for cash,
together with the aggregate net cash proceeds received by the Issuer or any
Restricted Subsidiary from such conversion or exchange at the time thereof.
(b) The provisions of the foregoing paragraph (a) will not prohibit:
(i) the payment of any dividend within 60 days after the date of its
declaration, if at the date of declaration such payment would be permitted by
the foregoing paragraph (a), provided, however, that such dividend will be
included in the calculation of the amount of Restricted Payments;
(ii) the redemption, repurchase or other acquisition or retirement of any
shares of any class of Capital Stock of the Issuer or any Restricted Subsidiary
in exchange for (including any such exchange pursuant to the exercise of a
conversion right or privilege in connection with which cash is paid in lieu of
the issuance of fractional shares), or out of the Net Cash Proceeds received by
the Issuer of, a substantially concurrent issue and sale of other shares of
Capital Stock (other than Redeemable Capital Stock, in the case of any such
redemption, repurchase or other acquisition or retirement of Capital Stock that
is not Redeemable Capital Stock) of MT Investors, Holding or the Issuer to any
Person (other than to a Subsidiary of the Issuer), provided that (x) such Net
Cash Proceeds will be excluded from clause (3) of the foregoing paragraph (a)
and (y) such redemption, repurchase or other acquisition or retirement will be
excluded in the calculation of the amount of Restricted Payments;
(iii) any redemption, repurchase or other acquisition or retirement of
Subordinated Indebtedness of the Issuer or any Note Guarantor in exchange for,
or out of the Net Cash Proceeds received by the Issuer of, a substantially
concurrent issue and sale of (x) Capital Stock (other than Redeemable Capital
Stock) of MT Investors, Holding or the Issuer to any Person (other than to a
Subsidiary of the Issuer), provided that such Net Cash Proceeds will be excluded
from clause (3) of the foregoing paragraph (a), or (y) Indebtedness of the
Issuer or any Note Guarantor so long as such Indebtedness complies with
subclauses (B) and (C) of clause (xviii) of paragraph (b) of the covenant
described in '--Limitation on Indebtedness'; provided, however, that such
redemption, repurchase or other acquisition or retirement will be excluded in
the calculation of the amount of Restricted Payments;
(iv) (A) loans, advances, dividends or distributions by the Issuer to
Holding or MT Investors (x) not to exceed $1 million in any fiscal year to
permit Holding or MT Investors to pay the operational expenses (including
professional fees and expenses) incurred by Holding or MT Investors in the
ordinary course of business to the extent related to Holding's investment in the
Issuer or MT Investors' investment in Holding, respectively, or (y) not to
exceed an amount necessary to permit Holding or MT Investors to pay its expenses
incurred in connection with any public offering of equity securities or of
Indebtedness permitted by the Indenture that has been terminated by the board of
directors of the Issuer, Holding or MT Investors, as applicable, in each case,
the net proceeds of which were specifically intended to be contributed or loaned
to the Issuer, and (B) loans or advances by the Issuer to Holding or MT
Investors not to exceed an amount necessary to permit each of Holding and MT
Investors to pay its interim expenses incurred in connection with any public
offering of equity securities or Indebtedness permitted by the Indenture, the
net proceeds of which are specifically intended to be contributed or loaned to
the Issuer, which loans or advances, unless such offering shall have been
terminated by the board of directors of the Issuer, Holding or MT Investors, as
applicable, shall be repaid to the Issuer promptly out of the proceeds of such
offering; provided, however, that such amounts will be excluded in the
calculation of the amount of Restricted Payments;
(v) loans, advances, dividends or distributions by the Issuer to Holding
or MT Investors to permit Holding or MT Investors, as the case may be, to
repurchase or otherwise acquire its common stock or options or other rights in
respect thereof, or payments by the Issuer to repurchase or otherwise acquire
such common stock or options or other rights in respect thereof, in connection
with the repurchase provisions under employee stock
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option agreements or employee stock purchase agreements, such payments, loans,
advances, dividends or distributions not to exceed $2 million in any fiscal year
and $5 million in the aggregate; provided, however, that such amounts will be
included in the calculation of the amount of Restricted Payments;
(vi) loans or advances to officers or employees of MT Investors, Holding,
the Issuer or any Restricted Subsidiary in the ordinary course of business not
to exceed $2 million in the aggregate outstanding at any time, provided,
however, that such amounts will be excluded in the calculation of the amount of
Restricted Payments;
(vii) payments pursuant to the Tax Sharing Agreement, provided, however,
that such payments will be excluded in the calculation of the amount of
Restricted Payments;
(viii) payments by the Issuer to Holding or MT Investors not to exceed an
amount necessary to permit Holding or MT Investors to make payments in respect
of its indemnification obligations owing to its directors or officers under
Holding's or MT Investors' charter, by-laws or indemnification agreements, to
the extent such payments relate to the Issuer or any of its Restricted
Subsidiaries or to Holding's or MT Investors's investment therein, provided,
however, that such payments will be excluded in the calculation of the amount of
Restricted Payments;
(ix) the payment by the Issuer of, or loans, advances, dividends or
distributions by the Issuer to Holding or MT Investors to pay, dividends on the
common stock of the Issuer, Holding or MT Investors, as applicable, following an
initial public offering of such common stock, in an amount not to exceed in any
fiscal year 6% of the net proceeds received by the Issuer, in or from such
public offering; provided, however, that such payments, loans, advances,
dividends or distributions will be included in the calculation of the amount of
Restricted Payments;
(x) payments by the Issuer, or payments by the Issuer to Holding or MT
Investors to enable Holding or MT Investors, as applicable, to make payments, to
holders of the common stock of the Issuer, Holding or MT Investors, as
applicable, in lieu of issuance of fractional shares of such common stock, in
connection with any recapitalization of the Issuer, Holding or MT Investors, as
applicable, such payments not to exceed $100,000 in the aggregate; provided,
however, that such payments will be included in the calculation of the amount of
Restricted Payments; or
(xi) any purchase or repayment of Subordinated Indebtedness upon a Change
of Control or an Asset Sale to the extent required by the agreement governing
such Subordinated Indebtedness but only if (x) in the case of a Change of
Control, the Issuer shall have complied with all of its obligations under the
covenant described in '-- Change of Control' and purchased all Notes tendered
pursuant to the offer to repurchase all the Notes required thereby prior to
purchasing or repaying such Subordinated Indebtedness or (y) in the case of an
Asset Sale, the Issuer shall have applied the Net Cash Proceeds from such Asset
Sale in accordance with the covenant described in '--Limitation on Disposition
of Proceeds of Asset Sales,' shall have made an Excess Proceeds Offer pursuant
to such covenant, and shall have purchased all Notes tendered pursuant to such
Excess Proceeds Offer prior to purchasing or repaying such Subordinated
Indebtedness, provided that (1) in either case the purchase price (stated as a
percentage of principal amount or issue price plus accrued original issue
discount, if less) of such Subordinated Indebtedness shall not be greater than
the price (stated as a percentage of principal amount) of the Notes pursuant to
any such offer to repurchase the Notes in the event of a Change of Control or
Excess Proceeds Offer, respectively, (2) in the case of such Asset Sale, the
aggregate principal amount of such Subordinated Indebtedness that the Issuer may
so purchase or repay may not exceed the amount of the Excess Proceeds, if any,
available for such Excess Proceeds Offer and remaining after the Issuer shall
have purchased all Notes tendered pursuant to such Excess Proceeds Offer, and
(3) in either case, any such purchase or repayment will be included in the
calculation of the amount of Restricted Payments.
Limitation on Transactions with Affiliates. (a) The Issuer will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, conduct
any business, enter into or suffer to exist any transaction or series of related
transactions (including the purchase, sale, conveyance, disposition, lease or
exchange of any property, the rendering of any service or the making of any loan
or advance) with, or for the benefit of, any Affiliate of the Issuer (an
'Affiliate Transaction') unless (i) such Affiliate Transaction is on terms no
less favorable to the Issuer or such Restricted Subsidiary than those that could
be obtained at the time of such Affiliate Transaction in a comparable arm's
length transaction with a Person who is not an Affiliate of the Issuer, and (ii)
in the event
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such an Affiliate Transaction involves aggregate payments or value of $5 million
or greater, (x) a majority of the Board of Directors of the Issuer, including a
majority of the Disinterested Directors, have determined in good faith that the
criteria set forth in clause (i) are satisfied and have approved the relevant
Affiliate Transaction, such approval to be evidenced by a Board Resolution, or
(y) in the event there are no Disinterested Directors, the Issuer has obtained a
written opinion of an investment banking firm or an independent appraiser or
accounting firm, in either case that is nationally recognized in the United
States, stating that the terms of such Affiliate Transaction are fair to the
Issuer and its Restricted Subsidiaries from a financial point of view (a
'Fairness Opinion'), and (iii) in the event that such Affiliate Transaction
involves aggregate payments or value of $15 million or greater, the Issuer has
obtained a Fairness Opinion with respect to such Affiliate Transaction and (iv)
in the event that such Affiliate Transaction involves aggregate payments or
value of $5 million or greater, the Issuer has delivered to the Trustee an
Officers' Certificate certifying that such Affiliate Transaction complies with
the foregoing clause (i), and that, if required by the foregoing clause (ii) or
(iii), such Affiliate Transaction has been approved by the Board of Directors
(including a majority of the Disinterested Directors) or the Issuer has obtained
a Fairness Opinion with respect thereto, together with copies of the relevant
Board Resolution or Fairness Opinion.
(b) The foregoing paragraph (a) will not apply to: (i) any transaction
permitted as a Restricted Payment pursuant to the covenant described in
'--Limitation on Restricted Payments,' (ii) the payment of reasonable and
customary regular fees to directors of the Issuer and its Restricted
Subsidiaries who are not employees of the Issuer or its Subsidiaries, (iii) any
transaction between the Issuer and a Restricted Subsidiary or between Restricted
Subsidiaries, (iv) any transaction with an officer or member of the board of
directors of the Issuer or any Restricted Subsidiary in the ordinary course of
business involving compensation, indemnity or employee benefit arrangements; (v)
loans or advances to officers of the Issuer or any Restricted Subsidiary in the
ordinary course of business not exceeding $2 million in the aggregate
outstanding at any time; (vi) payments pursuant to the Tax Sharing Agreement;
(vii) any agreement as in existence on the Issue Date, as the same may be
amended from time to time in any manner not adverse to the Holders; and (viii)
payment to AEA of fees in an aggregate amount not to exceed $1 million in any
fiscal year and the reimbursement of reasonable out-of-pocket expenses incurred
by AEA, in each case in connection with its performance of services pursuant to
the Management Services Agreement; (ix) the Acquisition and all transactions
related thereto (including but not limited to the financing thereof); and (x)
any transaction in the ordinary course of business or approved by a majority of
the Disinterested Directors, between the Issuer or any Restricted Subsidiary and
any Affiliate of the Issuer controlled by the Issuer that is a joint venture or
similar entity primarily engaged in a Related Business.
Limitation on Certain Liens. (a) The Issuer will not, and will not permit
any Restricted Subsidiary to, directly or indirectly, create, incur, assume or
suffer to exist any Lien (other than any Permitted Lien) on or with respect to
any of its property or assets (including any Capital Stock), whether held on the
Issue Date or thereafter acquired, or any income, profits or proceeds therefrom,
securing any Specified Indebtedness, unless (x) effective provision is made
contemporaneously therewith to secure the Notes and the Note Guarantees, as
applicable, (i) in the case of a Lien securing Subordinated Indebtedness, by a
perfected Lien on such property, assets, income, profits or proceeds that is
senior in priority to such Lien securing such Indebtedness, or (ii) in the case
of a Lien securing any other Specified Indebtedness, equally and ratably with
(or prior to) such Lien securing such Indebtedness and (y) any such Restricted
Subsidiary is a Note Guarantor.
(b) Notwithstanding the foregoing, any Lien created for the benefit of the
Notes and the Note Guarantees, as applicable, pursuant to the foregoing
paragraph (a) shall provide by its terms that such Lien shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer to any Person not an Affiliate of the Issuer of all of the Capital
Stock held by the Issuer or any Restricted Subsidiary in, or all or
substantially all the assets of, any Restricted Subsidiary creating such Lien
(which sale, exchange or transfer is not prohibited by the Indenture) or (ii)
the release and discharge of such Lien, which release and discharge occurs at a
time when (A) no other Specified Indebtedness remains secured by such property
or assets of the Issuer or such Restricted Subsidiary, as the case may be, or
(B) the holders of all such other Specified Indebtedness that is secured by such
property or assets of the Issuer or such Restricted Subsidiary also release
their security interest in such property or assets.
Limitation on Certain Guarantees. (a) The Issuer will not permit any
Restricted Subsidiary, directly or indirectly, to Guarantee any Specified
Indebtedness (other than any Permitted Guarantee) unless such Restricted
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Subsidiary simultaneously executes and delivers a supplemental indenture to the
Indenture providing for a Note Guarantee by such Restricted Subsidiary, provided
that if such Specified Indebtedness is Subordinated Indebtedness, such
Restricted Subsidiary's Guarantee with respect to such Specified Indebtedness
shall be subordinated in right of payment to such Restricted Subsidiary's Note
Guarantee substantially to the same extent as such Specified Indebtedness is
subordinated to the Notes or any Note Guarantee, as the case may be, or (if not
so subordinated) to any other Indebtedness of such Restricted Subsidiary.
(b) Notwithstanding the foregoing, any Note Guarantee by a Restricted
Subsidiary of the Notes shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon (i) any sale,
exchange or transfer to any Person not an Affiliate of the Issuer of all of the
Capital Stock held by the Issuer or any Restricted Subsidiary in, or all or
substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by the Indenture) or (ii) the release and
discharge of the Guarantee that resulted in the creation of such Note Guarantee,
except a discharge or release by or as a result of payment under such Guarantee,
which release and discharge occurs at a time when (A) no other Specified
Indebtedness remains Guaranteed by such Restricted Subsidiary (other than
pursuant to Permitted Guarantees) or (B) the holders of all such other
Indebtedness that is Guaranteed by such Restricted Subsidiary (other than
pursuant to Permitted Guarantees) also release their Guarantee by such
Restricted Subsidiary, except a release as a result of payment pursuant to such
Guarantee by such Restricted Subsidiary.
Certain Future Note Guarantors. (a) The Issuer will cause (x) certain U.S.
Restricted Subsidiaries, as provided in the covenant described in '--Restriction
on Transfer of Assets to Subsidiaries,' and (y) each U.S. Restricted Subsidiary
that Incurs Indebtedness (other than Specified U.S. Subsidiary Indebtedness), to
execute and deliver to the Trustee a supplemental indenture pursuant to which
such Subsidiary will Guarantee payment of the Notes. The Issuer also will have
the right to cause any Restricted Subsidiary to execute and deliver to the
Trustee a supplemental indenture pursuant to which such Restricted Subsidiary
will Guarantee payment of the Notes. Each Note Guarantee will be limited to an
amount not to exceed the maximum amount that can be Guaranteed by that
Subsidiary without rendering the Note Guarantee, as it relates to such
Subsidiary, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally.
For purposes of clause (x) of this paragraph (a), the Issuer shall have the
right to designate the U.S. Restricted Subsidiary or U.S. Restricted
Subsidiaries that constitute a U.S. Significant Subsidiary or U.S. Significant
Subsidiaries, as the case may be, required to provide a Note Guarantee or Note
Guarantees thereunder, provided that, after giving effect to such Note Guarantee
or Note Guarantees, there shall not be in existence any U.S. Restricted
Subsidiary that is a U.S. Significant Subsidiary.
(b) Notwithstanding the foregoing, any Note Guarantee by a Restricted
Subsidiary shall provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or transfer
to any Person not an Affiliate of the Issuer of all of the Capital Stock held by
the Issuer in, or all or substantially all the assets of, such Restricted
Subsidiary (which sale, exchange or transfer is not prohibited by the Indenture)
or (ii) in the case of any such Guarantee given by reason of clause (y) of the
first sentence of the foregoing paragraph (a), the repayment in full of the
Indebtedness that caused such Restricted Subsidiary to provide such Note
Guarantee, which repayment occurs at a time when such Restricted Subsidiary has
no obligation in respect of any other Indebtedness (other than Specified U.S.
Subsidiary Indebtedness) and would not otherwise be required to Guarantee the
Notes under any provision of the Indenture.
Limitation on Other Senior Subordinated Indebtedness. The Issuer will not,
and will not permit any Restricted Subsidiary that is a Note Guarantor to,
directly or indirectly, Incur any Indebtedness that is subordinate or junior in
right of payment in any respect to any other Indebtedness, unless such
Indebtedness is expressly subordinate in right of payment to, or ranks pari
passu with, the Notes, in the case of the Issuer, or the Note Guarantees, in the
case of a Note Guarantor; provided that the foregoing restriction shall not
apply to distinctions between categories of Senior Indebtedness or Guarantor
Senior Indebtedness that exist solely by reason of Liens or Guarantees arising
or created in respect of some but not all such Senior Indebtedness or Guarantor
Senior Indebtedness, as the case may be.
Limitation on the Sale or Issuance of Preferred Stock of Restricted
Subsidiaries. The Issuer will not sell, and will not permit any Restricted
Subsidiary to, directly or indirectly, issue or sell, any shares of Preferred
Stock of any Restricted Subsidiary except (i) to the Issuer or a Restricted
Subsidiary, or to directors as director's
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qualifying shares to the extent required by applicable law, or (ii) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary. The proceeds of
any sale of such Preferred Stock permitted by the preceding clause (ii) will be
treated as Net Cash Proceeds from an Asset Sale and must be applied in
accordance with the terms of the covenant described under '--Limitation on
Disposition of Proceeds of Asset Sales.'
Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. (a) The Issuer will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or otherwise cause
or suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i) pay, directly or indirectly,
dividends, in cash or otherwise, or make any other distribution on or in respect
of its Capital Stock or any other interest or participation in, or measured by,
its profits, (ii) pay any Indebtedness owed to the Issuer or any other
Restricted Subsidiary, (iii) make loans or advances to the Issuer or any other
Restricted Subsidiary, (iv) transfer any of its properties or assets to the
Issuer or any other Restricted Subsidiary (other than any customary restriction
on transfers of property subject to a Lien permitted under the Indenture that
would not adversely affect the Issuer's ability to satisfy its obligations
hereunder) or (v) Guarantee any Indebtedness of the Issuer or any other
Restricted Subsidiary, except for such encumbrances or restrictions existing
under or by reason of (a) applicable law, (b) customary non-assignment
provisions of any lease, license or other contract, (c) any agreement or other
instrument of a Person acquired by the Issuer or any Restricted Subsidiary in
existence at the time of such acquisition (but not created in contemplation
thereof), which encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired, (d) any existing agreement as in effect on
the Issue Date (to the extent of any encumbrances or restrictions in existence
thereunder on the Issue Date), including the Credit Agreement as in effect on
the Issue Date, (e) any encumbrance or restriction with respect to a Non-U.S.
Restricted Subsidiary pursuant to an agreement relating to Indebtedness of such
Non-U.S. Restricted Subsidiary permitted to be Incurred pursuant to clause (v),
(vi), (vii), (viii), (ix), (xi), (xii) or (xiii) of paragraph (b) of the
covenant described in '--Limitation on Indebtedness' above, (f) arising or
agreed to in the ordinary course of business and that do not, individually or in
the aggregate, detract from the value of property or assets of the Issuer or any
Restricted Subsidiary, in each case in any manner material to the Issuer or such
Restricted Subsidiary, (g) any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or disposition, (h) any
restriction contained in security agreement or mortgage securing Indebtedness of
any Restricted Subsidiary to the extent such restriction restricts the transfer
of the property subject to such security agreement or mortgage, (i)
subordination provisions contained in any intercompany note representing
Indebtedness of the Issuer owing to and held by any Restricted Subsidiary or
Indebtedness of a Note Guarantor owing to and held by the Issuer or any
Restricted Subsidiary, as contemplated by clause (iv)(y) of paragraph (b) of the
covenant described in '--Limitation on Indebtedness,' and (j) any agreement that
extends, refinances, renews or replaces any agreement or other instrument
described in clause (c), (d) or (e) above, which is not more restrictive or less
favorable to the Noteholders than those existing under the agreement being
extended, refinanced, renewed or replaced.
(b) Without limiting the foregoing, the Issuer will not permit Swiss
Subholding to, directly or indirectly, create, incur, assume or otherwise cause
or suffer to exist or become effective any encumbrance or restriction on the
ability of Swiss Subholding to pay dividends or make distributions, loans,
advances or other payments to the Issuer to enable the Issuer to pay principal
of the Notes at their final scheduled maturity (as in effect on the Issue Date)
and scheduled interest on the Notes, pursuant to the terms of the Credit
Agreement or any other agreement or instrument, except for such encumbrances or
restrictions permitted pursuant to clause (a), (c), (g), (i) or (j) of the
foregoing paragraph (a) (it being understood that the Credit Agreement will be
permitted to prohibit any redemption, repayment or acquisition of the Notes
prior to final scheduled maturity).
Restriction on Transfer of Assets to Subsidiaries. The Issuer will not,
and will not permit any Restricted Subsidiary that is a Note Guarantor to, sell,
convey, transfer or otherwise dispose of its assets or property to any U.S.
Restricted Subsidiary, except for any disposition (a) made in the ordinary
course of business (including intercompany loans and cash equity contributions),
(b) that, after giving effect thereto, does not cause the existence of a U.S.
Significant Subsidiary or (c) made to such U.S. Restricted Subsidiary if such
U.S. Restricted Subsidiary prior to or simultaneously with such disposition
executes and delivers a supplemental indenture to the
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Indenture providing for a Note Guarantee by such Restricted Subsidiary, which
Note Guarantee shall be subordinated to any Guarantee of such Restricted
Subsidiary of Senior Indebtedness of the Issuer and shall be subordinated to any
other Indebtedness of such Restricted Subsidiary (that is not subordinated or
junior in right of payment to any other Indebtedness of such Restricted
Subsidiary), in each case to the same extent as the Notes are subordinated to
the Senior Indebtedness of the Issuer under the Indenture.
Limitation on Disposition of Proceeds of Asset Sales. (a) The Issuer will
not, and will not permit any Restricted Subsidiary to, engage in any Asset Sale
unless (i) such Asset Sale is for not less than the Fair Market Value of the
assets sold (as determined, to the extent such Asset Sale involves a Fair Market
Value greater than $5 million, in good faith by the Board of Directors whose
determination will be conclusive and evidenced by a Board Resolution) and (ii)
at least 75% of the consideration thereof received by the Issuer or such
Restricted Subsidiary is in the form of cash or Cash Equivalents (with
Indebtedness of the Issuer or any Restricted Subsidiary being counted as cash
for such purpose if the Issuer and each Restricted Subsidiary, as the case may
be, is unconditionally released from liability therefor). Net Cash Proceeds of
any Asset Sale may be applied to repay Specified Senior Indebtedness (but only
if the related loan commitments (if any) or amounts available to be reborrowed
(if any) under such Specified Senior Indebtedness are permanently reduced by the
amount of such payment). To the extent that such Net Cash Proceeds are not
applied as provided in the preceding sentence, the Issuer or a Restricted
Subsidiary, as the case may be, may apply the Net Cash Proceeds from such Asset
Sale, within 360 days of such Asset Sale, to an investment in properties and
assets to replace the properties and assets that were the subject of such Asset
Sale or in properties and assets that will be used in the businesses of the
Issuer or its Restricted Subsidiaries, as the case may be, existing on the Issue
Date or in businesses reasonably related thereto. Any Net Cash Proceeds from any
Asset Sale not applied as provided in the preceding two sentences, within 360
days of such Asset Sale, constitute 'Excess Proceeds' subject to disposition as
provided below.
(b) When the aggregate amount of Excess Proceeds exceeds $15 million, the
Issuer shall, within 15 Business Days, make an offer to purchase (an 'Excess
Proceeds Offer') from all Noteholders of the Notes and, to the extent required
by the terms thereof, from the holders of Pari Passu Indebtedness of the Issuer,
an aggregate principal amount of Notes and any such Pari Passu Indebtedness
equal to such Excess Proceeds, at a purchase price in cash equal to 100% of the
outstanding principal amount thereof (or accreted value, as applicable) plus
accrued and unpaid interest, if any, to the purchase date in respect of the
Excess Proceeds Offer in accordance with the procedures set forth in the
Indenture or the agreements governing any such Pari Passu Indebtedness. To the
extent that the aggregate principal amount of Notes and any such Pari Passu
Indebtedness tendered pursuant to an Excess Proceeds Offer is less than the
Excess Proceeds, the Issuer may use such deficiency for general corporate
purposes. If the aggregate principal amount of Notes and any such Pari Passu
Indebtedness validly tendered and not withdrawn exceeds the Excess Proceeds, the
portion of the Excess Proceeds (x) payable in respect of the Notes shall be an
amount (the 'Note Amount') equal to the Excess Proceeds multiplied by a
fraction, the numerator of which is the outstanding principal amount of the
Notes, and the denominator of which is the sum of the outstanding principal
amount of the Notes and the outstanding principal amount (or accreted value, as
applicable) of any such Pari Passu Indebtedness (less the amount, if any, by
which such product exceeds the principal amount of Notes validly tendered and
not withdrawn) and (y) payable in respect of any such Pari Passu Indebtedness
shall be an amount equal to the excess of the Excess Proceeds over the Note
Amount. Upon completion of such Excess Proceeds Offer, the amount of Excess
Proceeds shall be reset to zero.
(c) The Issuer will comply, to the extent applicable, with the requirements
of Section 14(e) under the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Issuer will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this paragraph by virtue thereof.
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Change of Control. (a) Upon the occurrence of a Change of Control, each
Noteholder will have the right to require the Issuer to repurchase all or any
part of such Holder's Notes at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date), in
accordance with the terms contemplated in this covenant.
(b) A 'Change of Control' means the occurrence of any of the following
events:
(i) prior to an initial Public Equity Offering, the Permitted Holder
ceases to be the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of Voting Stock of each of the Issuer and
Holding representing more than 50% of the total voting power of the Voting Stock
of each of the Issuer and Holding (as a result of the acquisition or issuance of
securities, by merger or otherwise);
(ii) at any time after an initial Public Equity Offering, any 'person' or
'group' (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act), other than the Permitted Holder, is or becomes (as the result of the
acquisition or issuance of securities, by merger or otherwise) the Beneficial
Owner, directly or indirectly, of (A) more than 50% of the common stock of the
Issuer or Holding or (B) more than 50% of the total voting power of the Voting
Stock of the Issuer or Holding;
(iii) the merger or consolidation of the Issuer or Holding with or into
another Person, or of another Person with or into the Issuer or Holding, or the
sale, assignment, conveyance, transfer, lease or other disposition of all or
substantially all the assets of the Issuer or Holding to another Person, and, in
the case of any such merger or consolidation, the securities of the Issuer or
Holding, as the case may be, that are outstanding immediately prior to such
transaction and that represent 100% of the aggregate voting power of the Voting
Stock of the Issuer or Holding, as the case may be, are changed into or
exchanged for cash, securities or property, unless (x) pursuant to such
transaction such securities are changed into or exchanged for (A) Voting Stock
(other than Redeemable Capital Stock) of the surviving or transferee corporation
or (B) cash, securities and other property in an amount that could be paid by
the Issuer as a Restricted Payment under the Indenture, and (y) immediately
after giving effect to such transaction, no 'person' or 'group' (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), other than the
Permitted Holder, is or becomes (as the result of the acquisition or issuance of
securities, by merger or otherwise) the Beneficial Owner, directly or
indirectly, of more than 50% of the total voting power of the Voting Stock of
the surviving or transferee corporation;
(iv) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of the Issuer or
Holding (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Issuer or
Holding, as the case may be, was approved by a vote of 66 2/3% of the directors
then still in office who were either directors at the beginning of such period
or whose election as directors or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Issuer or Holding, as the case may be, then in office; or
(v) the approval by stockholders of the Issuer of any plan or proposal for
the liquidation or dissolution of the Issuer, or any final order, judgment or
decree of a court of competent jurisdiction shall be entered against the Issuer
decreeing the dissolution or liquidation of the Issuer.
(c) Prior to the mailing of the notice to Holders provided for in paragraph
(d) below, the Issuer shall have (x) terminated all commitments and repaid in
full all Indebtedness under the Credit Agreement and all other Credit Agreement
Obligations then due and owing, or (y) obtained the requisite consents under the
Credit Agreement to permit the purchase of the Notes as provided for under this
covenant. If a notice has been mailed when such condition precedent has not been
satisfied, the Issuer shall have no obligation to (and shall not) effect the
purchase of Notes until such time as such condition precedent is satisfied.
Failure to mail the notice on the date specified below or to have satisfied the
foregoing condition precedent by the date that the notice is required to be
mailed shall in any event constitute a covenant default under clause (iv) of
'--Defaults' herein.
(d) Within 30 days following any Change of Control (or at the Issuer's
option, prior to such Change of Control, in anticipation of such Change of
Control), the Issuer shall mail a notice to each Holder at its registered
address with a copy to the Trustee stating: (1) that a Change of Control has
occurred (or will occur) and that such Holder has the right to require the
Issuer to purchase such Holder's Notes at a purchase price in cash equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
date of repurchase (subject to
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the right of Holders of record on the record date to receive interest on the
relevant interest payment date); (2) the circumstances and relevant facts and
financial information regarding such Change of Control; (3) the repurchase date
(which shall be no earlier than 30 days nor later than 60 days from the date
such notice is mailed); (4) the instructions determined by the Issuer,
consistent with this covenant, that a Holder must follow in order to have its
Notes purchased; and (5) that, if such offer is made prior to such Change of
Control, payment is conditioned on the occurrence of such Change of Control.
(e) The Issuer will comply, to the extent applicable, with the requirements
of Section 14(e) under the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Issuer will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this paragraph by virtue thereof.
Reporting Requirements. Notwithstanding that the Issuer may not be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, to the extent permitted by the Exchange Act or the
interpretations of the SEC in respect thereof, the Issuer will file with the SEC
and provide, within five days after the Issuer is required to file the same with
the SEC, the Trustee with the annual reports and the information, documents and
other reports that are specified in Sections 13 and 15(d) of the Exchange Act.
In the event that the Issuer is not permitted to file such reports, documents
and information with the SEC, the Issuer will provide substantially similar
information to the Trustee, Noteholders and prospective Noteholders (upon
reasonable request) as if the Issuer were subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act. The Issuer also will comply with the
other provisions of TIA Section 314(a).
MERGER, CONSOLIDATION AND SALE OF ASSETS
The Issuer will not, in any transaction or series of related transactions,
merge or consolidate with or into, or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets to,
any Person or Persons, and the Issuer will not permit any Restricted Subsidiary
to enter into any such transaction or series of transactions if such transaction
or series of transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or other disposition of all or substantially all of
the properties and assets of the Issuer or of the Issuer and its Subsidiaries on
a consolidated basis to any other Person or Persons, unless at the time of and
immediately after giving effect thereto (i) either (A) if the transaction or
transactions is a merger or consolidation, the Issuer shall be the surviving
Person of such merger or consolidation, or (B) the Person formed by such
consolidation or into which the Issuer or such Restricted Subsidiary is merged
or to which the properties and assets of the Issuer or such Restricted
Subsidiary, as the case may be, substantially as an entirety, are sold,
assigned, transferred, leased or otherwise disposed of (any such surviving
Person or transferee Person being the 'Surviving Entity') shall be a corporation
organized and existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume by a supplemental
indenture executed and delivered to the Trustee, in form and substance
satisfactory to the Trustee, all the obligations of the Issuer under the Notes
and the Indenture, and in each case, the Indenture shall remain in full force
and effect; and (ii) immediately after giving effect to such transaction or
series of related transactions on a pro forma basis (including, without
limitation, any Indebtedness Incurred or anticipated to be Incurred in
connection with or in respect of such transaction or series of transactions),
(x) no Default or Event of Default shall have occurred and be continuing and (y)
the Issuer or the Surviving Entity, as the case may be, could Incur $1.00 of
additional Indebtedness pursuant to paragraph (a) of the covenant described in
'--Certain Covenants--Limitation on Indebtedness.'
In connection with any consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition contemplated hereby, the Issuer shall
deliver, or cause to be delivered, to the Trustee, in form and substance
satisfactory to the Trustee, an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition and the supplemental indenture in respect
thereof comply with the requirements under the Indenture. In addition, each Note
Guarantor, unless it is the other party to the transaction or unless its Note
Guarantee will be released and discharged in accordance with its terms as a
result of the transaction, will be required to confirm, by supplemental
indenture, that its Note Guarantee will apply to the obligations of the Issuer
or the Surviving Entity under the Indenture.
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Upon any consolidation or merger or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the assets of the
Issuer in accordance with the foregoing in which the Issuer is not the
continuing obligor under the Indenture, the Surviving Entity shall succeed to,
and be substituted for, and may exercise every right and power of, the Issuer
under the Indenture with the same effect as if such successor had been named as
the Issuer therein, and thereafter the predecessor Person shall be relieved of
all obligations under the Indenture and the Notes, except that the predecessor
Person in the case of a transfer by lease will not be released from the
obligation to pay the principal of, premium, if any, and interest on the Notes.
The Indenture will provide that for all purposes of the Indenture and the
Notes (including the provision of this covenant and the covenants described in
'--Certain Covenants--Limitations on Indebtedness,' '--Certain
Covenants--Limitation on Restricted Payments' and '--Certain
Covenants--Limitation on Certain Liens'), Subsidiaries of any Surviving Entity
will, upon such transaction or series of related transactions, become Restricted
Subsidiaries or Unrestricted Subsidiaries as provided pursuant to the definition
of 'Unrestricted Subsidiary' described in '--Certain Definitions,' and all
Indebtedness, and all Liens on property or assets, of the Surviving Entity and
its Subsidiaries (other than Indebtedness, and Liens on property or assets, of
the Issuer and its Restricted Subsidiaries outstanding immediately prior to such
transaction or series of related transactions) will be deemed to have been
Incurred upon such transaction or series of related transactions.
DEFAULTS
The following will be 'Events of Default' under the Indenture:
(i) default in the payment of principal of, or premium, if any, when
due and payable, on any of the Notes (at its Stated Maturity, upon optional
redemption, required repurchase, or otherwise); or
(ii) default in any payment of an installment of interest on any of
the Notes when due and payable, for 30 days; or
(iii) failure to perform or comply with any provision described in
'--Merger, Consolidation and Sale of Assets'; failure to offer to
repurchase or to repurchase the Notes in the Event of a Change of Control
in accordance with the provisions described in '--Certain Covenants--Change
of Control'; or
(iv) the Issuer or any Note Guarantor shall fail to perform or observe
any other term, covenant or agreement contained in the Notes, any Note
Guarantee or the Indenture (other than a Default specified in clause (i),
(ii) or (iii) above) for a period of 30 days after written notice of such
failure requiring the Issuer to remedy the same shall have been given (x)
to the Issuer by the Trustee or (y) to the Issuer and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Notes then
outstanding; or
(v) default or defaults under one or more mortgages, bonds, debentures
or other evidences of Indebtedness under which the Issuer or any Restricted
Subsidiary then has outstanding Indebtedness in excess of $15 million,
individually or in the aggregate, and either (a) such a principal amount of
such Indebtedness is already due and payable in full or (b) such default or
defaults have resulted in the acceleration of the maturity of such
Indebtedness; or
(vi) one or more judgments, orders or decrees of any court or
regulatory or administrative agency of competent jurisdiction for the
payment of money in excess of $15 million, either individually or in the
aggregate, shall be entered against the Issuer, any Note Guarantor or any
Significant Restricted Subsidiary or any of their respective properties and
shall not be discharged or fully bonded and either (a) any creditor shall
have commenced an enforcement proceeding upon such judgment, order or
decree or (b) there shall have been a period of 60 days after the date on
which any period for appeal has expired and during which a stay of
enforcement of such judgment, order or decree shall not be in effect; or
(vii) (A) any holder of at least $15 million in aggregate principal
amount of Indebtedness of the Issuer or any Restricted Subsidiary as to
which a default has occurred and is continuing shall commence judicial
proceedings (which proceedings shall remain unstayed for 5 Business Days)
to foreclose upon assets of the Issuer or any Restricted Subsidiary having
an aggregate Fair Market Value, individually or in the aggregate, in excess
of $15 million or shall have exercised any right under applicable law or
applicable security documents to take ownership of any such assets in lieu
of foreclosure or (B) any action described in the
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foregoing clause (A) shall result in any court of competent jurisdiction
issuing any order for the seizure of such assets; or
(viii) any Note Guarantee of a Significant Note Guarantor ceases to be
in full force and effect or is declared null and void or any Note Guarantor
denies that it has any further liability under any Note Guarantee, or gives
notice to such effect (other than by reason of the termination of the
Indenture or the release of any such Note Guarantee in accordance with the
Indenture); or
(ix) the occurrence of certain events of bankruptcy, insolvency or
reorganization with respect to the Issuer, any Significant Note Guarantor
or any Significant Restricted Subsidiary of the Issuer.
If an Event of Default (other than as specified in clause (ix) above with
respect to the Issuer) occurs and is continuing, the Trustee, by notice to the
Issuer, or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, by notice to the Trustee and the Issuer, may declare the
principal of, premium, if any, and accrued interest on all the Notes due and
payable immediately, upon which declaration all amounts payable in respect of
the Notes shall immediately be due and payable; provided that so long as the
Credit Agreement shall be in full force and effect, if an Event of Default shall
have occurred and be continuing (other than as specified in clause (ix) above
with respect to the Issuer), any such acceleration shall not be effective until
the earlier to occur of (x) five business days following delivery of a written
notice of such acceleration of the Notes to the agent under the Credit Agreement
and (y) the acceleration of any Indebtedness under the Credit Agreement. If an
Event of Default specified in clause (ix) above with respect to the Issuer
occurs and is continuing, then the principal of, premium, if any, and interest
on all the Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustees or any Holder.
Notwithstanding the foregoing, in the event of a declaration of
acceleration in respect of the Notes because (x) an Event of Default specified
in clause (v) above shall have occurred and be continuing, such declaration of
acceleration of the Notes and such Event of Default shall be automatically
annulled and rescinded and be of no further effect if the Indebtedness that is
the subject of such Event of Default has been discharged or paid in full or such
Event of Default shall have been cured or waived by the holders of such
Indebtedness and if such Indebtedness has been accelerated, then the holders
thereof have rescinded their declaration of acceleration in respect of such
Indebtedness or (y) an Event of Default specified in clause (vii) above shall
have occurred and be continuing, such declaration of acceleration of the Notes
and such Event of Default shall be automatically annulled and rescinded and be
of no further effect if the proceedings or enforcement action with respect to
the Indebtedness that is the subject of such Event of Default is terminated or
rescinded, or such Indebtedness is paid in full and only so long as any holder
of such Indebtedness shall not have applied any assets referenced in such clause
(vii) above in satisfaction of such Indebtedness and, in the case of both (x)
and (y) above, written notice of such discharge, cure or waiver and rescission,
as the case may be, shall have been given to the Trustee within 60 days after
such declaration of acceleration in respect of the Notes by the Issuer or by the
requisite holders of such Indebtedness or a trustee, fiduciary or agent for such
holders or other evidence satisfactory to the Trustee of such events is provided
to the Trustee and no other Event of Default shall have occurred which has not
been cured or waived during such 60-day period.
After a declaration of acceleration under the Indenture, but before a
judgment or decree for payment of money due has been obtained by the Trustee,
the Holders of a majority in aggregate principal amount of the outstanding
Notes, by written notice to the Issuer and the Trustee, may rescind such
declaration if: (a) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay (i) all sums paid or advanced by the Trustee under the
Indenture and the reasonable compensation, expenses, disbursements, and advances
of the Trustee, its agents and counsel, (ii) all overdue interest on all Notes,
(iii) the principal of, and premium, if any, on any Notes which have become due
otherwise than by such declaration of acceleration and interest thereon at the
rate borne by the Notes and (iv) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by the Notes which has
become due otherwise than by such declaration of acceleration; (b) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; and (c) all Events of Default, other than the
non-payment of principal of, premium, if any, and interest on the Notes that has
become due solely by such declaration of acceleration, have been cured or
waived.
The Holders of not less than a majority in aggregate principal amount of
the outstanding Notes may on behalf of the Holders of all the Notes waive any
past defaults under the Indenture, except a default in the payment
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of the principal of, premium, if any, or interest on any Note, or in respect of
a covenant or provision which under the Indenture cannot be modified or amended
without the consent of the holder of each Note outstanding.
No Holder of any of the Notes has any right to institute any proceeding
with respect to the Indenture or any remedy thereunder, unless the Holders of at
least 25% in aggregate principal amount of the outstanding Notes have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as Trustee under the Notes and the Indenture, the Trustee has
failed to institute such proceeding within 30 days after receipt of such notice
and the Trustee, within such 30-day period, has not received directions
inconsistent with such written request by Holders of a majority in aggregate
principal amount of the outstanding Notes. Such limitations do not apply,
however, to a suit instituted by a Holder of a Note for the enforcement of the
payment of the principal of, premium, if any, or interest on, such Note on or
after the respective due dates expressed in such Note.
During the existence of an Event of Default, the Trustee is required to
exercise such rights and powers vested in it under the Indenture and use the
same degree of care and skill in its exercise thereof as a prudent person would
exercise under the circumstances in the conduct of such person's own affairs.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, whether or not an Event of Default shall occur and be continuing, the
Trustee under the Indenture is not under any obligation to exercise any of its
rights or powers under the Indenture at the request or direction of any of the
Holders of the Notes unless such Holders shall have offered to the Trustee
reasonable security or indemnity. Subject to certain provisions concerning the
rights of the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee under the Indenture.
If a Default or an Event of Default occurs and is continuing and is known
to the Trustee, the Trustee shall mail to each Holder of the Notes notice of the
Default or Event of Default within 30 days after the occurrence thereof. Except
in the case of a Default or an Event of Default in payment of principal of,
premium, if any, or interest on any Notes, the Trustee may withhold the notice
to the Holders of such Notes if a committee of its Trust Officers in good faith
determines that withholding the notice is in the interest of the Holders.
The Issuer is required to furnish to the Trustee annual statements as to
the performance by the Issuer and the Note Guarantors of their respective
obligations under the Indenture and as to any default in such performance. The
Issuer is also required to notify the Trustee within 30 days of any Default.
DEFEASANCE OR COVENANT DEFEASANCE OF INDENTURE
The Issuer may, at its option and at any time, elect to terminate the
obligations of the Issuer and any Note Guarantor with respect to the outstanding
Notes ('defeasance'). Such defeasance means that the Issuer shall be deemed to
have paid and discharged the entire indebtedness represented by the outstanding
Notes, except for (i) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, premium, if any, and interest on such
Notes when such payments are due, (ii) the Issuer's obligations to issue
temporary Notes, register the transfer or exchange of any Notes, replace
mutilated, destroyed, lost or stolen Notes and maintain an office or agency for
receipt of payments in respect of the Notes, (iii) the rights, powers, trusts,
duties, indemnities and immunities of the Trustee, (iv) the defeasance
provisions of the Indenture and (v) the Note Guarantees to the extent they
relate to the foregoing. In addition, the Issuer may, at its option and at any
time, elect to terminate the obligations of the Issuer and any Note Guarantor
with respect to the covenants described in '-- Certain Covenants' ('covenant
defeasance'), and thereafter any omission to comply with such obligations shall
not constitute a Default or an Event of Default with respect to the Notes. In
the event covenant defeasance occurs, the Events of Default specified in clauses
(v), (vi) and (vii) of the first paragraph in '--Defaults' will no longer
constitute Events of Default with respect to the Notes.
In order to exercise either defeasance or covenant defeasance, (i) the
Issuer must irrevocably deposit with the Trustee, in trust for the benefit of
Noteholders, cash in Dollars, U.S. Government Obligations, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal of,
premium, if any, and interest on the outstanding Notes on the Stated Maturity of
such principal or installment of interest; (ii) the Issuer shall have delivered
to the Trustee an Opinion of Counsel stating that the Noteholders will not
recognize income, gain or loss for federal income tax
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purposes as a result of such defeasance or covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance or covenant defeasance
had not occurred (in the case of defeasance, such opinion must refer to and be
based upon a ruling published by the Internal Revenue Service or a change in
applicable federal income tax laws, in either case after the Issue Date); (iii)
no Default or Event of Default shall have occurred and be continuing on the date
of such deposit or insofar as Events of Default described in clause (ix) of the
first paragraph in '-- Defaults', at any time during the period ending on the
91st day after the date of deposit; (iv) such defeasance or covenant defeasance
shall not cause the Trustee to have a conflicting interest with respect to any
securities of the Issuer or any Note Guarantor; (v) such defeasance or covenant
defeasance shall not result in a breach or violation of, or constitute a default
under the Indenture, or any other agreement or instrument to which the Issuer or
any Note Guarantor is a party or by which it is bound; (vi) the Issuer shall
have delivered to the Trustee an Opinion of Counsel stating that (A) the trust
funds will not be subject to any rights of holders of Senior Indebtedness,
including under the subordination provisions of the Indenture, and (B) after the
91st day following the deposit or after the date such Opinion of Counsel is
delivered, the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally; and (vii) the Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel satisfactory to the Trustee,
each stating that all conditions precedent under the Indenture to either
defeasance or covenant defeasance, as the case may be, have been complied with.
SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of the
Notes, as expressly provided for in the Indenture) as to all outstanding Notes
when (i) either (a) all the Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid) have
been delivered to the Trustee for cancellation or (b) all Notes not theretofore
delivered to the Trustee for cancellation (x) have become due and payable, (y)
will become due and payable at their Stated Maturity within one year or (z) are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Issuer, (ii) the Issuer has irrevocably deposited or
caused to be deposited with the Trustee, in trust for the benefit of
Noteholders, cash in Dollars, U.S. Government Obligations, or a combination
thereof, in an amount sufficient to pay and discharge the entire indebtedness on
the Notes (except lost, stolen or destroyed Notes which have been replaced or
paid) not theretofore delivered to the Trustee for cancellation, including
principal, premium, if any, and interest at such Stated Maturity or redemption
date, together with irrevocable instructions from the Issuer directing the
Trustee to apply such funds to the payment thereof at such Stated Maturity or
redemption date, as the case may be; (iii) the Issuer has paid all other sums
payable under the Indenture by the Issuer; and (iv) the Issuer has delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent under the Indenture relating to the satisfaction
and discharge of the Indenture have been complied with.
AMENDMENTS AND WAIVERS
The Issuer, the Note Guarantors and the Trustee may amend the Indenture or
Notes without notice to any Noteholder but with the written consent of the
Holders of at least a majority in principal amount of the Notes; provided,
however, that, without the consent of the Holder of each outstanding Note
affected thereby, an amendment or waiver may not (i) reduce the principal amount
of, extend the Stated Maturity of or alter the redemption provisions of, the
Notes; (ii) change the currency in which the Notes or any premium or the
interest thereon is payable; (iii) reduce the percentage in principal amount of
Notes that must consent to an amendment, supplement or waiver or consent to take
any action under the Indenture, the Notes or any Note Guarantee; (iv) modify any
of the provisions described under '-- Certain Covenants--Limitation on Other
Senior Subordinated Indebtedness' above or the subordination provisions of the
Indenture in respect of the Notes or any Note Guarantee in a manner adverse to
the Holders; (v) impair the right of any Holder to receive payment of principal
of, premium, if any, and interest on such Holder's Notes on or after the due
dates therefor or to institute suit for the enforcement of any payment on or
with respect to such Notes; (vi) waive a default in payment with respect to the
Notes or any Note Guarantee (except for any waiver of a default in payment to
the extent resulting from a declaration of acceleration under the Indenture,
which declaration has been rescinded by the Holders as
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contemplated by the fourth full paragraph under '--Defaults'); (vii) following
the occurrence of a Change of Control or an Asset Sale, amend, change or modify
the obligation of the Issuer to offer to repurchase and to repurchase the Notes
in the event of a Change of Control or make and consummate the Excess Proceeds
Offer with respect to any Asset Sale, including by modifying any of the
provisions or definitions with respect thereto; (viii) reduce or change the rate
or time for payment of interest on the Notes; or (ix) release any Significant
Note Guarantor from any of its obligations under its Note Guarantee or the
Indenture other than in compliance with the terms of the Indenture.
Without the consent of any Noteholder, the Issuer, the Note Guarantors and
the Trustee may amend the Indenture to cure any ambiguity, omission, defect or
inconsistency, to provide for the assumption by a successor corporation of the
obligations of the Issuer under the Indenture, to add Guarantees with respect to
the Notes, to secure the Notes, to add to the covenants of the Issuer for the
benefit of the Noteholders, to surrender any right or power conferred upon the
Issuer or any Note Guarantor, to make any change that does not adversely affect
the rights of any Noteholder or to comply with any requirement of the SEC in
connection with the qualification of the Indenture under the TIA.
The consent of the Noteholders is not necessary under the Indenture to
approve the particular form of any proposed amendment. It is sufficient if such
consent approves the substance of the proposed amendment. After an amendment
under the Indenture becomes effective, the Issuer is required to mail to
Noteholders a notice briefly describing such amendment. However, the failure to
give such notice to all such Noteholders, or any defect therein, will not impair
or affect the validity of the amendment.
No amendment to the subordination provisions of the Indenture or the Notes
described under '--Ranking; Subordination,' including by modifying any of the
definitions relating thereto, may be made that adversely affects the rights of
any Senior Indebtedness then outstanding unless the holders of such Senior
Indebtedness (or any group or representative thereof authorized to give a
consent) consent in writing to such amendment.
NO PERSONAL LIABILITY OF STOCKHOLDERS, OFFICERS, DIRECTORS
No director, officer, employee, incorporator or stockholder, as such, of
the Issuer, Holding, any Note Guarantor or any Subsidiary of the foregoing shall
have any personal liability in respect of the obligations of the Issuer,
Holding, any Note Guarantor or any Subsidiary of the foregoing, as the case may
be, under the Notes, any Note Guarantee or the Indenture by reason of his or its
status as such.
THE TRUSTEE
United States Trust Company of New York is to be the Trustee under the
Indenture and has been appointed by the Issuer as Registrar and Paying Agent
with respect to the Notes.
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are set forth specifically
in the Indenture. During the existence of an Event of Default, the Trustee will
exercise such of the rights and powers vested in it under the Indenture and use
the same degree of care and skill in its exercise as a prudent Person would
exercise under the circumstances in the conduct of such Person's own affairs.
GOVERNING LAW
The Indenture and the Notes will be governed by the laws of the State of
New York, without regard to the principles of conflicts of laws thereof.
BOOK-ENTRY; DELIVERY AND FORM
Upon issuance, the Notes will be represented by the Global Notes that will
be deposited with, or on behalf of, the Depositary and registered in the name of
a nominee of the Depositary. Except under the circumstances described below, the
Global Notes will not be exchangeable for definitive Notes and Notes will not
otherwise be issuable in definitive form.
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Beneficial interests in the Global Notes will be shown on, and transfers
thereof will be effected only through, records maintained in book-entry form by
the Depositary (with respect to its Participants' interests) and its
Participants.
Upon issuance of the Global Notes, the Depositary will credit, on its
internal system, the respective principal amount of the individual beneficial
interests in the Global Notes to persons who have accounts with the Depositary
('Participants'). Such accounts initially will be designated by or on behalf of
the Underwriters. Ownership of beneficial interests in the Global Notes will be
shown on, and the transfer of such beneficial interests will be effected only
through, records maintained by the Depositary or its nominee (with respect to
interests of Participants) and the records of Participants (with respect to
interests of persons other than Participants).
So long as the Depositary or its nominee is the registered owner of the
Global Notes, the Depositary or such nominee, as the case may be, will be
considered the sole owner and Holder of the Notes represented by the Global
Notes for all purposes under the Indenture and the Notes. Accordingly,
beneficial owners of an interest in the Global Notes must rely on the procedures
of the Depositary, and if such person is not a Participant, on the procedures of
the Participant through which such person owns its interest, to exercise any
rights and fulfill any obligations of a Holder under the Indenture. No
beneficial owner of an interest in the Global Notes will be able to transfer
that interest except in accordance with the Depositary's applicable procedures,
in addition to those provided for in the Indenture. In addition, the ability of
a Person having a beneficial interest in Notes represented by a Global Note to
pledge such interest to Persons or entities that do not participate in the
Depositary's system, or to otherwise take actions with respect to such
beneficial interest, may be affected by the lack of a physical certificate
evidencing such interest.
Payments of the principal of, premium, if any, and interest on, the Global
Notes will be made to the Depositary or its nominee, as the case may be, as the
registered owner thereof. None of the Issuer, the Trustee or any Paying Agent
will have any responsibility or liability for any aspect of the records relating
to, or payments made on account of, beneficial interests in the Global Notes or
for maintaining, supervising or reviewing any records relating to such
beneficial interests.
The Issuer expects that the Depositary or its nominee, upon receipt of any
payment of principal, premium or interest in respect of the Global Notes, will
credit Participants' accounts with payments in amounts proportionate to such
Participants' respective beneficial interests in the principal amount of such
Global Notes, as shown on the records of the Depositary or its nominee. The
Issuer also expects that payments by Participants to owners of beneficial
interests in the Global Notes held through such Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
Participants.
The Depositary will take any action permitted to be taken by a Holder of
Notes (including the presentation of Notes for exchange as described below) only
at the direction of one or more Participants to whose accounts interests in the
Global Notes are credited and only in respect of such portion of the aggregate
principal amount of Notes as to which such Participant or Participants has or
have given such direction.
The Depositary is a limited purpose trust company organized under the laws
of the State of New York, a 'banking organization' within the meaning of New
York Banking Law, a member of the Federal Reserve System, a 'clearing
corporation' within the meaning of the Uniform Commercial Code and a 'clearing
agency' registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depositary was created to hold securities for its Participants and
facilitate the clearance and settlement of securities transactions between
Participants through electronic book-entry changes in accounts of its
Participants, thereby eliminating the need for physical movement of
certificates. Indirect access to the Depositary's system is available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant ('Indirect Participants').
Although the Depositary and its Participants are expected to follow the
foregoing procedures in order to facilitate transfers of interests in the Global
Notes among Participants, they are under no obligation to perform or continue to
perform such procedures, and such procedures may be discontinued at any time.
None of the Issuer,
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the Trustee nor any Paying Agent will have any responsibility for the
performance by the Depositary, Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Issuer
believes to be reliable, but the Issuer takes no responsibility for the accuracy
thereof.
Owners of beneficial interests in the Global Notes will be entitled to
receive certificated Notes, if the Depositary is at any time unwilling or unable
to continue as, or ceases to be, a 'clearing agency' registered under Section
17A of the Exchange Act, and a successor to the Depositary registered as a
'clearing agency' under Section 17A of the Exchange Act is not appointed by the
Issuer within 90 days. In addition to the foregoing, on or after the occurrence
of an Event of Default under the Indenture, owners of beneficial interests in
the Global Notes will be entitled to request and receive certificated Notes.
Any certificated Notes issued in exchange for beneficial interests in the
Global Notes will be registered in such name or names as the Depositary shall
instruct the Trustee. It is expected that such instructions will be based upon
directions received by the Depositary from Participants with respect to
ownership of beneficial interests in the Global Notes.
CERTAIN DEFINITIONS
'Acquired Indebtedness' means (x) Indebtedness of a Person existing at the
time such Person was acquired by the Issuer or (y) Indebtedness of a Person
assumed by the Issuer or a Restricted Subsidiary in connection with its
acquisition of assets from such Person, in each case other than Indebtedness
Incurred in connection with, or in contemplation of the transaction or series of
related transactions pursuant to which such Person became a Subsidiary or such
assets were so acquired by the Issuer or a Restricted Subsidiary.
'Acquisition' means the acquisition pursuant to the Stock Purchase
Agreement, dated as of April 2, 1996, between AEA MT Inc., AG fur
Prazisioninstrumente Greifensee, Switzerland and Ciba-Geigy AG, as amended to
the Issue Date.
'Acquisition Indebtedness' means Indebtedness of a Restricted Subsidiary
(x) Incurred solely for the purpose of financing the acquisition of the Capital
Stock of a Person that after giving effect to such acquisition will be a
Restricted Subsidiary, or assets constituting substantially all of a separate
division or separate business unit of a Person, and (y) the proceeds of which
(net of fees and expenses (including fees and expenses of legal counsel and
investment banks) directly related to such Incurrence) are used to pay the
purchase price for such Capital Stock or assets.
'AEA' means AEA Investors Inc., a Delaware corporation, or any legal
successor thereto as a result of a reorganization thereof that does not involve
any change in control thereof.
'Affiliate' of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
'control' when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
'controlling' and 'controlled' have meanings correlative to the foregoing. For
purposes of the provisions described in '--Certain Covenants--Limitation on
Transactions with Affiliates' only, 'Affiliate' shall also mean any Beneficial
Owner of shares representing 10% or more of the total voting power of the Voting
Stock (on a fully diluted basis) of the Issuer, and any Person who would be an
Affiliate of any such Beneficial Owner pursuant to the first sentence hereof.
'Asset Sale' means any sale, issuance, conveyance, transfer, lease or other
disposition (including by merger, consolidation or otherwise) by the Issuer or
any Restricted Subsidiary, in one or a series of related transactions, of: (a)
any Capital Stock of any Subsidiary of the Issuer; (b) all or substantially all
of the properties and assets of any division or line of business of the Issuer
or any Restricted Subsidiary; or (c) other than in the ordinary course of
business, any properties or assets of the Issuer or a Restricted Subsidiary. For
the purposes of this definition, the term 'Asset Sale' shall not include any
sale, issuance, conveyance, transfer, lease or other disposition of properties
or assets (i) to the Issuer or any Restricted Subsidiary, (ii) that is governed
by the
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provisions described in '--Merger, Consolidation and Sale of Assets', (iii) in
one transaction or a series of related transactions, involving assets with a
Fair Market Value not in excess of $2.5 million or (iv) involving assets with a
Fair Market Value not in excess of $5 million for all such dispositions in the
aggregate in any fiscal year.
'Attributable Debt' in respect of a Sale/Leaseback Transaction means, as at
the time of determination, the present value (discounted at the interest rate
assumed in making calculations in accordance with FAS 13) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
'Average Life' means, with respect to any Indebtedness, as at any date of
determination, the quotient obtained by dividing (a) the sum of the products of
(i) the number of years from such date to the date or dates of each successive
scheduled principal payment (including, without limitation, any sinking fund
requirements) of such Indebtedness multiplied by (ii) the amount of each such
principal payment by (b) the sum of all such principal payments.
'Beneficial Owner' means a 'beneficial owner' as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a Person shall be deemed to be a
'beneficial owner' of all securities that such Person has the right to acquire,
whether that right is exercisable immediately or only after the passage of time.
'Board of Directors' means the Board of Directors of the Issuer or a
designated committee thereof.
'Board Resolution' means a copy of a resolution certified by the Secretary
of the Issuer to have been duly adopted by the Board of Directors (or a
designated committee thereof) and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
'Business Day' means a day other than a Saturday, Sunday or any other day
on which banking institutions in New York State are authorized or required by
law to close.
'Capital Expenditure Indebtedness' means any Indebtedness of the Issuer or
any Restricted Subsidiary (whether consisting of Capitalized Lease Obligations,
Purchase Money Obligations or otherwise) Incurred (x) for the purpose of
financing all or any part of the purchase price, cost of construction or
improvement of any fixed or capital assets used in a Related Business and (y) no
later than 180 days after the date of such acquisition or the date of completion
of such construction or improvement.
'Capital Stock' of any Person means any and all shares of, rights to
purchase, warrants or options for, or participations or other interests in
(however designated) equity of such Person, including Preferred Stock, but
excluding any debt securities convertible into such equity.
'Capitalized Lease Obligations' means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease.
'Cash Equivalents' means (i) any security, maturing not more than one year
after the date of acquisition, issued by the United States of America, or an
instrumentality or agency thereof and guaranteed fully as to principal, premium,
if any, and interest by the United States of America; (ii) any certificate of
deposit, time deposit or bankers' acceptance (or, with respect to non-U.S.
banking institutions, similar instruments), maturing not more than one year
after the day of acquisition, issued by any commercial banking institution that
is a member of the Federal Reserve System or a commercial banking institution
organized and located in a country recognized by the United States of America,
in each case, having combined capital and surplus and undivided profits of not
less than $500,000,000 (or the foreign currency equivalent thereof), whose
short-term debt has a rating, at the time as of which any investment therein is
made, of 'P-1' (or higher) according to Moody's or 'A-1' (or higher) according
to S&P; (iii) commercial paper maturing not more than one year after the date of
acquisition issued by a corporation (other than an Affiliate or Subsidiary of
the Issuer) with a rating, at the time as of which any investment therein is
made, of 'P-1' (or higher) according to Moody's or 'A-1' (or higher) according
to S&P; (iv) any money market deposit accounts issued or offered by a commercial
banking institution that is a member of the Federal Reserve System or a
commercial banking institution organized and located in a
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country recognized by the United States of America, in each case, having
combined capital and surplus and undivided profits in excess of $500,000,000 (or
the foreign currency equivalent thereof); and (v) other short-term investments
utilized by Non-U.S. Restricted Subsidiaries in accordance with normal
investment practices for cash management not exceeding $5 million in aggregate
principal amount outstanding at any time.
'Commodities Agreements' means one or more of the following agreements
entered into by a Person and one or more financial institutions: commodity
future contracts, forward contracts, options or other similar agreements or
arrangements designed to protect against fluctuations in the price of, or the
shortage of supply of, commodities from time to time.
'Consolidated Assets' means the total assets of the Issuer and its
Restricted Subsidiaries shown on the Consolidated balance sheet of the Issuer
and its Restricted Subsidiaries prepared in accordance with GAAP as of the last
day of the immediately preceding fiscal quarter.
'Consolidated Coverage Ratio' as of any date of determination means the
ratio of (i) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters ending prior to the date of such determination
for which consolidated financial statements of the Issuer are available to (ii)
Consolidated Interest Expense for such four fiscal quarters, provided, however,
that:
(1) if the Issuer or any Restricted Subsidiary (x) has Incurred any
Indebtedness since the beginning of such period that remains outstanding on
such date of determination or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such Indebtedness
and the application of the proceeds thereof as if such Indebtedness had
been Incurred on the first day of such period or (y) has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of the period that is no longer outstanding on such date of
determination, or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio involves a discharge of Indebtedness,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect to such discharge of such Indebtedness,
including with the proceeds of such new Indebtedness, as if such discharge
had occurred on the first day of such period (except that, in making such
computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average daily balance of such Indebtedness
during such four-quarter period);
(2) if since the beginning of such period the Issuer or any Restricted
Subsidiary shall have disposed of any company or any business or any group
of assets constituting an operating unit (a 'Disposal'), (x) EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of such Disposal
for such period or increased by an amount equal to the EBITDA (if negative)
directly attributable thereto for such period and (y) Consolidated Interest
Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of
the Issuer or any Restricted Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Issuer and its continuing
Restricted Subsidiaries in connection with such Disposal for such period
(and, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Issuer and its
continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
(3) if since the beginning of such period the Issuer or any Restricted
Subsidiary (by merger or otherwise) shall have acquired any company or any
business or any group of assets constituting an operating unit (an
'Acquisition'), EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto (including the
Incurrence of any Indebtedness) as if such Acquisition had occurred on the
first day of such period; and
(4) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Issuer or any Restricted Subsidiary since the beginning of such period)
shall have made any Disposal or Acquisition that would have required an
adjustment pursuant to clause (2) or (3) above if made by the Issuer or a
Restricted Subsidiary during such period, EBITDA and Consolidated
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Interest Expense for such period shall be calculated after giving pro forma
effect thereto as if such Disposal or Acquisition occurred on the first day
of such period.
If any Indebtedness bears a floating rate of interest and is being given
pro forma effect, the interest expense on such Indebtedness shall be calculated
as if the rate in effect on the date of determination had been the applicable
rate for the entire period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term as at the date of determination in excess of 12 months). If any
Indebtedness bears, at the option of the Issuer or a Restricted Subsidiary, a
fixed or floating rate of interest and is being given pro forma effect, the
interest expense on such Indebtedness shall be computed by applying, at the
option of the Issuer, either a fixed or floating rate. If any Indebtedness which
is being given pro forma effect was Incurred under a revolving credit facility,
the interest expense on such Indebtedness shall be computed based upon the
average daily balance of such Indebtedness during the applicable period. In
making any calculation of the Consolidated Coverage Ratio for any period prior
to the date of the closing of the Acquisition, the Acquisition shall be deemed
to have taken place on the first day of such period.
'Consolidated Income Tax Expense' means for any period, as applied to any
Person, the provision for federal, state, local and foreign income taxes and
capital taxes of such Person and its Consolidated Subsidiaries for such period
as recorded under 'provision for taxes' on the statement of operations as
determined in accordance with GAAP.
'Consolidated Interest Expense' means, for any period, the total interest
expense of the Issuer and its Consolidated Subsidiaries, as determined in
accordance with GAAP, plus, to the extent Incurred by the Issuer and its
Restricted Subsidiaries in such period but not included in such interest
expense, (i) amortization of debt discount (including amortization of fees),
(ii) the interest portion of any deferred payment obligation which in accordance
with GAAP is required to be reflected on an income statement, (iii) net costs
(including amortization of discounts and fees) associated with Interest Rate
Agreements or Currency Agreements (other than Currency Agreements permitted by
clause (viii) (B) of paragraph (b) of the covenant described in '--Certain
Covenants-- Limitation on Indebtedness'), (iv) interest accruing on any
Indebtedness of any other Person that is Guaranteed by the Issuer or any
Restricted Subsidiary, (v) all commissions, discounts and other fees and charges
with respect to letters of credit and bankers' acceptance financing, (vi) all
accrued interest, (vii) the aggregate dividends paid or accrued on Preferred
Stock held by Persons other than the Issuer or a Wholly Owned Subsidiary, (viii)
the interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid by the Issuer and the Restricted Subsidiaries during such
period as determined on a consolidated basis in accordance with GAAP, and (ix)
the cash contributions to any employee stock ownership plan or similar trust to
the extent such contributions are used by such plan or trust to pay interest or
fees to any Person (other than the Issuer) in connection with Indebtedness
Incurred by such plan or trust.
'Consolidated Net Income' means, for any period, the net income (loss) of
the Issuer and its Consolidated Subsidiaries, as determined in accordance with
GAAP; provided, however, that there shall not be included in such Consolidated
Net Income: (i) any net income of any Person that is not the Issuer or a
Restricted Subsidiary, except that, subject to limitations contained in clause
(iv) below, the Issuer's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Person during such period to the
Issuer or a Restricted Subsidiary as a dividend or other distribution (subject,
in the case of a dividend or other distribution to a Restricted Subsidiary, to
the limitations contained in clause (iii) below); (ii) any net income or loss of
any Person acquired by the Issuer or a Subsidiary in a pooling of interests
transaction for any period prior to the date of such acquisition; (iii) any net
income of any Restricted Subsidiary if such Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to the
Issuer, except that, subject to the limitations contained in (iv) below, the
Issuer's equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash that could have been distributed by such Restricted Subsidiary
during such period to the Issuer or another Restricted Subsidiary as a dividend
(subject, in the case of a dividend that could have been made to another
Restricted Subsidiary, to the limitation contained in this clause); (iv) any
gain or loss realized upon any Asset Sale and any gain or loss realized upon the
sale or other disposition of any Capital Stock of any Person; (v) any
extraordinary gain or loss as recorded on the statement of operations in
accordance with GAAP; (vi) the cumulative effect of a change in accounting
principles as recorded on the statement of operations in accordance
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with GAAP; (vii) all deferred financing costs written off in connection with the
early extinguishment of indebtedness under the Credit Agreement or the Notes as
recorded on the statement of operations in accordance with GAAP; (viii) any
charge relating to the closure of the Westerville, Ohio facility as recorded on
the statement of operations in accordance with GAAP; (ix) nonrecurring charges
related to the Acquisition and any other acquisition by the Issuer or any
Restricted Subsidiary occurring after the Issue Date as recorded on the
statement of operations in accordance with GAAP; (x) non-cash, nonrecurring
charges as recorded on the statement of operations in accordance with GAAP; (xi)
unrealized gains or losses in respect of Currency Agreements permitted by clause
(viii)(B) of paragraph (b) of the covenant described in '--Certain
Covenants--Limitation on Indebtedness' as recorded on the statement of
operations in accordance with GAAP; (xii) unrealized foreign currency
transaction gains or losses in respect of Indebtedness of any Person denominated
in a currency other than the functional currency of such Person and permitted to
be Incurred under the covenant described in '--Certain Covenants--Limitation on
Indebtedness' as recorded on the statement of operations in accordance with
GAAP; and (xiii) any expense relating to bonuses paid by Ciba-Geigy AG or its
Affiliates (other than an Affiliate that will be an Affiliate of the Issuer
following consummation of the Acquisition) to employees of the Issuer or any
Restricted Subsidiary pursuant to agreements entered into in connection with the
disposition of the Mettler-Toledo Group by Ciba-Geigy AG, as recorded on the
statement of operations in accordance with GAAP; provided that in the case of
any amount or charge specified in clause (vii), (viii), (ix), (x), (xi), (xii)
or (xiii), such amount or charge shall be net of any tax or tax benefit to the
Company or any of its Consolidated Subsidiaries resulting therefrom.
'Consolidated Non-Cash Charges' of any Person means, for any period, the
aggregate depreciation, amortization and other non-cash charges of such Person
and its Consolidated Subsidiaries for such period, on a Consolidated basis, as
determined in accordance with GAAP (excluding any non-cash charge that requires
an accrual or reserve for cash charges for any future period).
'Consolidation' means the consolidation of the amounts of each of the
Restricted Subsidiaries with those of the Issuer in accordance with GAAP
consistently applied; provided, however, that 'Consolidation' will not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Issuer or any Restricted Subsidiary in an Unrestricted Subsidiary will be
accounted for as an investment. The term 'Consolidated' has a correlative
meaning.
'Credit Agreement' means the Credit Agreement dated as of the Issue Date,
among the Issuer and Swiss Subholding, as borrowers, Merrill Lynch Capital
Corporation, as agent and arranger, The Bank of Nova Scotia, as administrative
agent, Credit Suisse and Lehman Commercial Paper Inc. as co-agents and the other
financial institutions which are to become parties from time to time thereto, as
such agreement may be amended, modified, supplemented, renewed, refunded,
replaced, increased or refinanced (in whole or in part) from time to time by one
or more instruments or agreements with the same or other, or any combination of
the same and other, lenders and, in each case, including, without limitation,
any related notes, letters of credit and applications therefor, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, in each case as amended, modified, supplemented, renewed, refunded,
replaced, increased or refinanced (in whole or in part) from time to time by one
or more instruments or agreements. Without limiting the generality of the
foregoing, the term 'Credit Agreement' shall, subject to the covenants of the
Indenture, include any agreement (i) changing the maturity of any Indebtedness
incurred thereunder or contemplated thereby, (ii) adding Subsidiaries of the
Issuer as additional borrowers or guarantors thereunder, (iii) increasing the
amount of Indebtedness incurred thereunder or available to be borrowed
thereunder or (iv) otherwise altering the terms and conditions thereof.
'Credit Agreement Obligations' means all monetary obligations of every
nature of the Issuer or a Restricted Subsidiary, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities, from time to time owed to the
lenders or any agent under or in respect of the Credit Agreement.
'Currency Agreement' means in respect of any Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
'Default' means any event that is, or after notice or passage of time, or
both, would be, an Event of Default.
'Designated Senior Indebtedness' means (i) all Senior Indebtedness and
Guarantor Senior Indebtedness under the Credit Agreement Obligations and (ii) if
no Senior Indebtedness or Guarantor Senior Indebtedness is
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outstanding under the Credit Agreement Obligations or if the lenders under the
Credit Agreement shall have consented thereto, any other Senior Indebtedness (or
for certain purposes more fully described in the Indenture, Guarantor Senior
Indebtedness) which (a) at the time of incurrence exceeds $25 million in
aggregate principal amount and (b) is specifically designated by the Issuer (or,
in the case of Guarantor Senior Indebtedness, by the relevant Note Guarantor) in
the instrument evidencing such Senior Indebtedness or Guarantor Senior
Indebtedness as 'Designated Senior Indebtedness.'
'Disinterested Director' means a member of the Board of Directors who does
not have any material direct or indirect financial interest in or with respect
to any transaction or series of transactions.
'Dollar' or '$' means the lawful money of the United States of America.
'EBITDA' for any period means the sum of Consolidated Net Income,
Consolidated Interest Expense, Consolidated Income Tax Expense and Consolidated
Non-Cash Charges deducted in computing Consolidated Net Income, without
duplication, in each case for such period, of such Person and its Consolidated
Subsidiaries on a Consolidated basis, all determined in accordance with GAAP.
'Event of Default' has the meaning set forth under '--Defaults' herein.
'Exchange Act' means the Securities Exchange Act of 1934, as amended.
'Fair Market Value' means, with respect to any asset or property, the price
that could be negotiated in an arm's-length free market transaction, for cash,
between an informed and willing seller and an informed and willing buyer,
neither of whom is under undue pressure or compulsion to complete the
transaction.
'GAAP' means generally accepted accounting principles in the United States
of America as in effect as of the Issue Date, including those set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board. All ratios and computations based on
GAAP contained in the Indenture shall be computed in conformity with GAAP.
'Guarantee' means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person and any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation of such Person (whether
arising by virtue of partnership arrangements, or by agreement to keep well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided, however, that the term
'Guarantee' shall not include endorsements for collection or deposit in the
ordinary course of business. The term 'Guarantee' used as a verb has a
corresponding meaning.
'Guarantor Senior Indebtedness' means, with respect to any Note Guarantor,
the principal of, premium, if any, and interest (including interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable state, federal or foreign law) on and other
amounts due on or in connection with (including any fees, premiums, expenses,
including costs of collection, and indemnities) any Indebtedness of such Note
Guarantor, whether outstanding on the Issue Date or thereafter created, incurred
or assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Note Guarantee of such Note Guarantor. Without limiting the
generality of the foregoing, 'Guarantor Senior Indebtedness' shall also include
the principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable state, federal or foreign law) on, and all other
amounts owing in respect of, (i) all Credit Agreement Obligations of such Note
Guarantor and (ii) all Related Currency and Interest Rate Protection
Obligations, if any, of such Note Guarantor, in each case whether
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outstanding on the Issue Date or thereafter created, incurred or assumed and
including in respect of claims under guarantees, claims for indemnity, claims in
relation to Related Currency and Interest Rate Protection Obligations, expense
reimbursement and fees. Notwithstanding the foregoing, 'Guarantor Senior
Indebtedness' shall not include (a) Indebtedness evidenced by the Note Guarantee
of such Note Guarantor, (b) Indebtedness that is pari passu with or expressly
subordinated or junior in right to payment to any Guarantor Senior Indebtedness
of such Note Guarantor, (c) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) of Title 11, United States Code,
is by its terms without recourse to such Note Guarantor, (d) any repurchase,
redemption or other obligation in respect of Redeemable Capital Stock of such
Note Guarantor, (e) to the extent it might constitute Indebtedness, amounts
owing for goods, materials or services purchased in the ordinary course of
business or consisting of trade payables or other current liabilities (other
than any current liabilities owing under the Credit Agreement Obligations or the
current portion of any long-term Indebtedness which would constitute Guarantor
Senior Indebtedness but for the operation of this clause (e)), (f) to the extent
it might constitute Indebtedness, amounts owed by such Note Guarantor for
compensation to employees or for services rendered to such Note Guarantor, (g)
to the extent it might constitute Indebtedness, any liability for federal,
state, local, foreign or other taxes owed or owing by such Note Guarantor, (h)
Indebtedness of such Note Guarantor to a Subsidiary of the Issuer and (i) that
portion of any Indebtedness of such Note Guarantor which at the time of
Incurrence is Incurred in violation of the Indenture; provided, however, that
such Indebtedness shall be deemed not to have been Incurred in violation of the
Indenture for purposes of this clause (i) if (x) the holder(s) of such
Indebtedness or their representative or such Note Guarantor shall have furnished
to the Trustee an opinion of recognized independent legal counsel, unqualified
in all material respects, addressed to the Trustee (which legal counsel may, as
to matters of fact, rely upon an Officers' Certificate of such Note Guarantor)
to the effect that the Incurrence of such Indebtedness does not violate the
provisions of the Indenture or (y) such Indebtedness consists of Credit
Agreement Obligations, and the holder(s) of such Indebtedness or their agent or
representative (1) had no actual knowledge at the time of Incurrence that the
Incurrence of such Indebtedness violated the Indenture and (2) shall have
received a certificate from an Officer of such Note Guarantor to the effect that
the Incurrence of such Indebtedness does not violate the provisions of the
Indenture.
'Holder' or 'Noteholder' means the Person in whose name a Note is
registered on the Registrar's books.
'Holding' means Mettler-Toledo Holding Inc., a Delaware corporation, and
any successor thereto.
'Incur' means issue, assume, Guarantee, incur or otherwise become liable
for, provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Person at the time it becomes a Subsidiary.
'Indebtedness' means, with respect to any Person, without duplication, (a)
all liabilities of such Person for borrowed money or for the deferred purchase
price of property or services, excluding any trade accounts payable and other
accrued current liabilities incurred in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit, banker's acceptance or other
similar credit transaction, or in connection with any agreement to purchase,
redeem, exchange, convert or otherwise acquire for value any Capital Stock of
such Person, or any warrants, rights or options to acquire such Capital Stock,
now or hereafter outstanding, (b) all obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (c) all indebtedness of
such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade accounts payable arising in the ordinary course of business, (d)
all Capitalized Lease Obligations and all Attributable Debt of such Person, (e)
all Indebtedness referred to in the preceding clauses of other Persons and all
dividends of other Persons, the payment of which is secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon property (including, without limitation, accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness (the amount of
such obligation being deemed to be the lesser of the value of such property or
asset or the amount of the obligation so secured), (f) all Guarantees of such
Person in respect of Indebtedness of another Person of any of the types referred
to in this definition, (g) all Redeemable Capital Stock of such Person valued at
the greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued dividends, (h) all Currency
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Agreements, Interest Rate Agreements and Commodities Agreements of such Person
and (i) any amendment, supplement, modification, deferral, renewal, extension or
refunding of any liability of such Person of any of the types referred to in
clauses (a) through (h) above. Notwithstanding the foregoing, Indebtedness shall
not include any Guarantee by the Issuer of the obligations of Ciba-Geigy AG or
its Affiliates under its Guarantee to the Pension Benefit Guaranty Corporation
with respect to any unfunded liabilities of any employee benefit plan of the
Issuer.
For purposes hereof, (x) the 'maximum fixed repurchase price' of any
Redeemable Capital Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the Indenture, and if such price
is based upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the board of
directors of the issuer of such Redeemable Capital Stock and (y) Indebtedness is
deemed to be incurred pursuant to a revolving credit facility each time an
advance is made thereunder. When any Person becomes a Restricted Subsidiary
there shall be deemed to have been an Incurrence by such Restricted Subsidiary
of all Indebtedness for which it is liable at the time it becomes a Restricted
Subsidiary. If the Issuer or any Restricted Subsidiary, directly or indirectly,
Guarantees Indebtedness of another Person, there shall be deemed to be an
Incurrence of such Guaranteed Indebtedness as if the Issuer or such Restricted
Subsidiary had directly incurred or otherwise assumed such Guaranteed
Indebtedness.
'Interest Rate Agreements' means with respect to any Person any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement as to which such Person is party or a beneficiary.
'Investment' in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
'Unrestricted Subsidiary' and the covenant described in '--Certain
Covenants--Limitation on Restricted Payments', (i) 'Investment' shall include
the portion (proportionate to the Issuer's equity interest in such Subsidiary)
of the Fair Market Value of the net assets of any Subsidiary of the Issuer at
the time that such Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Issuer shall be deemed to continue to have a permanent
'Investment' in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Issuer's 'Investment' in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Issuer's direct or
indirect equity interest in such Subsidiary) of the Fair Market Value of the net
assets of such Subsidiary at the time of such redesignation; and (ii) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its Fair Market Value at the time of such transfer, in each case, as determined
in good faith by the Board of Directors.
'Issue Date' means the date on which the Notes are originally issued.
'Issuer' means MT Acquisition Corp., a Delaware corporation, and upon
consummation of the Merger, means Mettler-Toledo, Inc., a Delaware corporation,
the survivor of the Merger, until a successor Person shall have become such
pursuant to the applicable provisions of the Indenture, and thereafter 'Issuer'
shall mean such successor Person.
'Lien' means any mortgage, pledge, security interest, hypothecation,
assignment, conveyance, preference, priority, encumbrance, lien (statutory or
other) or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
'Management Services Agreement' means the Management Services Agreement
dated as of the Issue Date, between AEA and the Issuer, as in effect on the
Issue Date and as the same may be amended from time to time in any manner not
adverse to the Holders or in accordance with the procedures set forth in the
Indenture.
'Merger' means the merger of MT Acquisition Corp. with and into
Mettler-Toledo, Inc. immediately upon consummation of the Acquisition.
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'Moody's' means Moody's Investors Service, Inc. or any successor rating
agency.
'MT Investors' means MT Investors Inc., a Delaware corporation, and any
successor thereto.
'Net Cash Proceeds' means, (a) with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents, including payments in respect
of deferred payment obligations when received in the form of, or stock or other
assets when disposed for, cash or Cash Equivalents (except to the extent that
such obligations are financed or sold, but only to the extent they continue to
be, with recourse to the Issuer or any Restricted Subsidiary), net of (i)
brokerage commissions and other reasonable fees and expenses (including fees and
expenses of legal counsel and investment banks) actually incurred and related to
such Asset Sale, (ii) provisions for all taxes payable as a result of such Asset
Sale, (iii) amounts required to be paid to any Person (other than the Issuer or
any Restricted Subsidiary) owning a beneficial interest in the assets subject to
the Asset Sale and (iv) appropriate amounts to be provided by the Issuer or any
Restricted Subsidiary, as the case may be, as a reserve required in accordance
with GAAP against any liabilities associated with such Asset Sale and retained
by the Issuer or any Restricted Subsidiary, as the case may be, after such Asset
Sale, and (b) with respect to any issuance or sale of Capital Stock, means the
proceeds of such issuance or sale in the form of cash or Cash Equivalents,
including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed for, cash or Cash
Equivalents (except to the extent that such obligations are financed or sold,
but only to the extent they continue to be, with recourse to the Issuer or any
Restricted Subsidiary), net of (i) brokerage commissions and other reasonable
fees and expenses (including fees of legal counsel and investment banks)
actually incurred and related to such issuance or sale and (ii) provisions for
all taxes payable as a result of such issuance or sale; in each case, as
reflected in an Officers' Certificate delivered to the Trustee.
'Non-Dollar Indebtedness' means Indebtedness denominated in any currency
other than Dollars.
'Non-U.S. Restricted Subsidiary' means any Restricted Subsidiary of the
Issuer other than a U.S. Restricted Subsidiary.
'Note Guarantee' means the Guarantee of the Notes by Holding, and any
Guarantee of the Notes that may from time to time be executed and delivered
pursuant to the terms of the Indenture. Each such Note Guarantee shall be in the
form prescribed in the Indenture.
'Note Guarantor' means any Person that has issued a Note Guarantee.
'Officer' means the Chairman of the Board, Chief Executive Officer, Chief
Financial Officer, the President, any Vice President, the Treasurer or the
Secretary of the Issuer.
'Officers' Certificate' means a certificate signed by two Officers.
'Opinion of Counsel' means a written opinion in form and substance
reasonably satisfactory to the Trustee from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Issuer or the Trustee.
'Pari Passu Indebtedness' means any Indebtedness of the Issuer or any Note
Guarantor ranking pari passu with the Notes or the applicable Note Guarantee,
respectively.
'Permitted Guarantee' means (i) any Guarantee of Acquired Indebtedness
given by any Restricted Subsidiary prior to (and not in contemplation of) the
Incurrence of such Acquired Indebtedness by the Issuer or a Restricted
Subsidiary, which Guarantee and Acquired Indebtedness are Incurred pursuant to
clause (vi) of paragraph (b) (or, in the case of Acquired Indebtedness of the
Issuer, paragraph (a)) of the covenant described in '--Certain
Covenants--Limitation on Indebtedness' or (ii) any Guarantee by the Issuer of
the obligations of Ciba-Geigy AG or its Affiliates under its Guarantee to the
Pension Benefit Guaranty Corporation with respect to any unfunded liabilities of
any employee benefit plan of the Issuer.
'Permitted Holder' means AEA and its current, former and future employees,
stockholders, directors and officers and the Issuer's officers, and (i) trusts
for the benefit of such Persons or the spouses, issue, parents or
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other relatives of such Persons, (ii) entities controlling or controlled by such
Persons and (iii) in the event of the death of any such individual Person, heirs
or testamentary legatees of such Person.
'Permitted Investment' means any of the following: (i) Investments in Cash
Equivalents, (ii) Investments in the Issuer or in any Restricted Subsidiary
(including any Person that thereby becomes a Restricted Subsidiary), (iii)
Investments in existence on the Issue Date, (iv) receivables owing to the Issuer
or any Restricted Subsidiary, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms,
(v) Interest Rate Agreements designed to protect the Issuer or any Restricted
Subsidiary against fluctuations in interest rates in respect of Indebtedness of
the Issuer or any Restricted Subsidiary, and Currency Agreements designed to
protect the Issuer or any Restricted Subsidiary against fluctuations in foreign
currency exchange rates in respect of foreign exchange exposures incurred by the
Issuer or any Restricted Subsidiary in the ordinary course of business, in each
case, permitted by the covenant described in '--Certain Covenants--Limitation on
Indebtedness,' (vi) Investments in the Notes, (vii) Investments in a joint
venture or similar entity that is not a Restricted Subsidiary and is primarily
engaged in a Related Business, not to exceed $20 million at any time, (viii)
Investments in securities of any Person received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
Person, (ix) Investments received by the Issuer or its Restricted Subsidiaries
as consideration for Asset Sales effected in compliance with the covenant
described in '--Certain Covenants--Limitation on Disposition of Proceeds of
Asset Sales,' (x) Investments in an amount not exceeding $5 million in the
aggregate outstanding at any time, and (xi) any Investment in Ciba-Geigy AG or
any Affiliate thereof resulting from the advancement of amounts not exceeding
SFr 38 million equal to withholding taxes payable in connection with dividends
paid to Ciba-Geigy AG or any Affiliate thereof in connection with the
Acquisition, pending receipt of refund of such withholding taxes.
'Permitted Lien' means (i) any Lien as existing on the Issue Date and
listed on a schedule to the Indenture; (ii) any Lien on any property or assets
of a Restricted Subsidiary granted in favor of the Issuer or any Restricted
Subsidiary; (iii) any Lien securing the Notes or any Note Guarantee; (iv) any
Lien securing Acquired Indebtedness Incurred pursuant to clause (vi) of
paragraph (b) of the covenant described in '--Certain Covenants--Limitation on
Indebtedness', which Lien (x) is created prior to (and not in connection with or
in contemplation of) the Incurrence of such Acquired Indebtedness by the Issuer
or any Restricted Subsidiary, and (y) does not extend to any property or assets
of the Issuer or any Restricted Subsidiary other than the assets acquired in
connection with the Incurrence of such Acquired Indebtedness; (v) any Lien
securing any Indebtedness Incurred pursuant to clause (xi) of paragraph (b) of
the covenant described in '--Certain Covenants--Limitation on Indebtedness',
provided, however, that such Lien may not extend to any other property owned by
the Issuer or any Restricted Subsidiary at the time such Lien is Incurred; (vi)
any Lien in favor of the Trustee under the Indenture; and (vii) any extension,
renewal or replacement in whole or in part, of any Lien described in the
foregoing clauses (i) through (vi), provided, that any such extension, renewal
or replacement shall be no more restrictive in any material respect than the
Lien so extended, renewed or replaced and shall not extend to any additional
property or assets.
'Person' means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof, or any
other entity.
'Preferred Stock', as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) that is preferred as
to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over shares
of Capital Stock of any other class of such Person.
'Public Equity Offering' means an underwritten public offering of newly
issued shares of common stock of MT Investors, Holding or the Issuer pursuant to
an effective registration statement under the Securities Act, on a primary basis
(whether alone or in conjunction with any secondary public offering).
'Public Market' means an established public trading market existing after a
Public Equity Offering has been consummated.
'Purchase Money Obligation' means any Indebtedness secured by a Lien on
real or personal property related to the business of the Issuer or any
Restricted Subsidiary that is purchased by the Issuer or any Restricted
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Subsidiary after the Issue Date; provided that (i) any security agreement or
conditional sales or other title retention contract pursuant to which the Lien
on such property is created shall be entered into within 180 days after the
purchase of such property and shall at all times be confined solely to such
property, (ii) at no time shall the aggregate principal amount of the
Indebtedness secured by such property be increased and (iii)(A) the Indebtedness
secured thereby shall not exceed the purchase price of such property or (B) the
Indebtedness secured thereby shall be with recourse solely to such property.
'Redeemable Capital Stock' means any class or series of Capital Stock that,
either by its terms, by the terms of any security into which it is convertible
or exchangeable or by contract or otherwise, is, or upon the happening of an
event or passage of time would be, required to be redeemed, or matures, on or
prior to the 91st day after any Stated Maturity of the Notes, or is redeemable
at the option of the holder thereof at any time on or prior to the 91st day
after any Stated Maturity of the Notes, or, at the option of the holder thereof,
is convertible into or exchangeable for Indebtedness or Redeemable Capital Stock
at any time on or prior to the 91st day after any Stated Maturity of the Notes.
'Refinancing Costs' means, with respect to any refinancing of term loan
borrowings under the Credit Agreement, an amount equal to (x) the lesser of (I)
the stated amount of any premium or other payment required to be paid in
connection with such refinancing pursuant to the Credit Agreement and (II) the
amount of premium or other payment actually paid by the Issuer, Swiss Subholding
or any Restricted Subsidiary at such time to refinance such borrowings, plus (y)
the amount of expenses of the Issuer, Swiss Subholding or any Restricted
Subsidiary incurred in connection with such refinancing.
'Related Business' means the businesses of the Issuer and the Restricted
Subsidiaries as conducted on the Issue Date, and any businesses related,
ancillary or complementary to such businesses.
'Related Currency and Interest Rate Protection Obligations' means all
monetary obligations of every nature of the Issuer or a Note Guarantor under or
in respect of any Currency Agreement or Interest Rate Agreement of the Issuer or
such Note Guarantor either (a) to the extent such monetary obligations relate to
Credit Agreement Obligations or (b) to the extent such monetary obligations are
secured by collateral securing Credit Agreement Obligations.
'Restricted Subsidiary' means any Subsidiary of the Issuer other than an
Unrestricted Subsidiary.
'Sale/Leaseback Transaction' means an arrangement relating to property now
owned or hereafter acquired by the Issuer or a Restricted Subsidiary, whereby
the Issuer or a Restricted Subsidiary transfers such property to a Person and
the Issuer or a Restricted Subsidiary leases it from such Person.
'S&P' means Standard & Poor's Rating Group (a division of McGraw Hill Inc.)
or any successor rating agency.
'SEC' means the Securities and Exchange Commission.
'Secured Indebtedness' means any Indebtedness of the Issuer or any
Subsidiary of the Issuer secured by a Lien.
'Securities Act' means the Securities Act of 1933, as amended.
'Senior Indebtedness' means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable state, federal
or foreign law) on and other amounts due on or in connection with (including any
fees, premiums, expenses, including costs of collection, and indemnities) any
Indebtedness of the Issuer, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Notes. Without limiting the generality
of the foregoing, 'Senior Indebtedness' shall also include the principal of,
premium, if any, and interest (including any interest accruing subsequent to the
filing of a petition of bankruptcy at the rate provided for in the documentation
with respect thereto, whether or not such interest is an allowed claim under
applicable state, federal or foreign law) on, and all other amounts owing in
respect of, (i) all Credit Agreement Obligations of the Issuer and (ii) all
Related Currency
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and Interest Rate Protection Obligations of the Issuer, in each case whether
outstanding on the Issue Date or thereafter created, incurred or assumed and
including in respect of claims under guarantees, claims for indemnity, claims in
relation to Related Currency and Interest Rate Protection Obligations, expense
reimbursement and fees. Notwithstanding the foregoing, 'Senior Indebtedness'
shall not include (a) Indebtedness evidenced by the Notes, (b) Indebtedness that
is pari passu with or expressly subordinated or junior in right of payment to
any Senior Indebtedness of the Issuer, (c) Indebtedness which, when incurred and
without respect to any election under Section 1111(b) of Title 11, United States
Code, is by its terms without recourse to the Issuer, (d) any repurchase,
redemption or other obligation in respect of Redeemable Capital Stock of the
Issuer, (e) to the extent it might constitute Indebtedness, amounts owing for
goods, materials or services purchased in the ordinary course of business or
consisting of trade payables or other current liabilities (other than any
current liabilities owing under the Credit Agreement Obligations or the current
portion of any long-term Indebtedness which would constitute Senior Indebtedness
but for the operation of this clause (e)), (f) to the extent it might constitute
Indebtedness, amounts owed by the Issuer for compensation to employees or for
services rendered to the Issuer, (g) to the extent it might constitute
Indebtedness, any liability for federal, state, local, foreign or other taxes
owed or owing by the Issuer, (h) Indebtedness of the Issuer to a Subsidiary of
the Issuer and (i) that portion of any Indebtedness of the Issuer which at the
time of Incurrence is Incurred in violation of the Indenture; provided, however,
that such Indebtedness shall be deemed not to have been Incurred in violation of
the Indenture for purposes of this clause (i) if (x) the holder(s) of such
Indebtedness or their representative or the Issuer shall have furnished to the
Trustee an opinion of recognized independent legal counsel, unqualified in all
material respects, addressed to the Trustee (which legal counsel may, as to
matters of fact, rely upon an Officers' Certificate of the Issuer) to the effect
that the Incurrence of such Indebtedness does not violate the provisions of the
Indenture or (y) such Indebtedness consists of Credit Agreement Obligations, and
the holder(s) of such Indebtedness or their agent or representative (1) had no
actual knowledge at the time of Incurrence that the Incurrence of such
Indebtedness violated the Indenture and (2) shall have received a certificate
from an Officer of the Company to the effect that the Incurrence of such
Indebtedness does not violate the provisions of the Indenture.
'Senior Subordinated Indebtedness' means the Notes and any other
Indebtedness of the Issuer that specifically provides that such Indebtedness is
to rank pari passu with the Notes and is not subordinated by its terms to any
Indebtedness or other obligation of the Issuer that is not Senior Indebtedness.
'Senior Subordinated Note Obligations' means (i) any principal of, premium,
if any, and interest on, and any other amounts owing in respect of, the Notes
payable pursuant to the terms of the Notes or the Indenture or upon acceleration
of the Notes, including, without limitation, amounts received upon the exercise
of rights of rescission or other rights of action (including claims for damages)
or otherwise, to the extent relating to the purchase price of the Notes or
amounts corresponding to such principal of, premium, if any, interest, or other
amounts owing with respect to, the Notes and (ii) in the case of any Note
Guarantor, any obligations with respect to the foregoing or otherwise under its
Note Guarantee.
'Significant Note Guarantor' means (x) Holding or (y) any other Note
Guarantor that would be a 'significant subsidiary' of the Issuer as defined in
Rule 1-02 of Regulation S-X under the Securities Act and the Exchange Act, as
such Rule is in effect on the Issue Date, provided that for purposes of this
definition, all references in such Rule 1-02 to '10 percent' shall be deemed to
be '5 percent'.
'Significant Restricted Subsidiary' means any Restricted Subsidiary of the
Issuer that would be a 'significant subsidiary' of the Issuer as defined in Rule
1-02 of Regulation S-X under the Securities Act and the Exchange Act, as such
Rule is in effect on the Issue Date.
'Specified Indebtedness' means (i) any Indebtedness of the Issuer or any
Note Guarantor that is Pari Passu Indebtedness or Subordinated Indebtedness or
(ii) any Indebtedness of any Restricted Subsidiary that is Subordinated
Indebtedness, provided, however, that Specified Indebtedness shall never include
any Credit Agreement Obligation otherwise constituting Guarantor Senior
Indebtedness or Senior Indebtedness.
'Specified Senior Indebtedness' means any Senior Indebtedness, Guarantor
Senior Indebtedness, or Indebtedness of any Restricted Subsidiary (other than a
Note Guarantor) that is not Subordinated Indebtedness.
'Specified U.S. Subsidiary Indebtedness' means Indebtedness of any U.S.
Restricted Subsidiary (a) owing to and held by the Issuer or any U.S. Restricted
Subsidiary Incurred pursuant to clause (iv) of paragraph (b) of the
covenant described in '--Certain Covenants--Limitation on Indebtedness,' (b)
Incurred pursuant to clause (vi), (viii), (ix), (x), (xiv), (xv)(1), (xv)(2),
(xvi)(A) or (xvi)(B) of such paragraph (b) or (c) Incurred pursuant to clause
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(xviii) of such paragraph (b) to refinance Indebtedness previously Incurred
pursuant to clause (vi) of such paragraph (b).
'Stated Maturity' means, when used with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the purchase of
such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
'Subordinated Indebtedness' means (i) any Indebtedness of the Issuer or any
Note Guarantor (whether outstanding on the Issue Date or thereafter Incurred)
that is subordinated or junior in right of payment to the Notes or any Note
Guarantee or (ii) Indebtedness of any Restricted Subsidiary (other than a Note
Guarantor) that is subordinated or junior in right of payment to any other
Indebtedness of such Restricted Subsidiary.
'Subsidiary' of any Person means any corporation, association, partnership,
limited liability company or other business entity of which more than 50% of the
total voting power of shares of Capital Stock (including partnership or other
equity interests) generally entitled (without the incurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by (i) such Person or (ii) one
or more Subsidiaries of such Person.
'Swiss Subholding' means Mettler-Toledo Holding AG, a Swiss corporation.
'Tax Sharing Agreement' means the Tax Sharing Agreement dated as of the
Issue Date, between the Issuer and MT Investors, as in effect on the Issue Date
and as the same may be amended from time to time in any manner not adverse to
the Holders.
'TIA' means the Trust Indenture Act of 1939 as in effect on the date of the
Indenture, provided, however, that in the event the Trust Indenture Act of 1939
is amended after such date, 'TIA' means to the extent required by such
amendment, the Trust Indenture Act of 1939 as so amended.
'Trust Officer' means the Chairman of the Board, the President or any other
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
'Trustee' means the party named as such in the Indenture until a successor
replaces it and, thereafter, means the successor.
'Unrestricted Subsidiary' means (i) any Subsidiary of the Issuer that at
the time of determination shall be an Unrestricted Subsidiary (as designated by
the Board of Directors as provided below) and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate (a 'Designation')
any Subsidiary of the Issuer (other than a Subsidiary that is a Note Guarantor
or owns any Capital Stock of, or owns, or holds any Lien on, any property of the
Issuer or any other Subsidiary of the Issuer that is not a Subsidiary of the
Subsidiary to be so designated) to be an Unrestricted Subsidiary if: (a) no
Default shall have occurred and be continuing at the time of or after giving
effect to such Designation; (b) the Issuer could make an Investment at the time
of such Designation (assuming the effectiveness thereof) in an amount (the
'Designation Amount') equal to the Fair Market Value of the Capital Stock of
such Subsidiary on such date; and (c) the Issuer could incur $1.00 of additional
Indebtedness under paragraph (a) of the covenant described under '--Certain
Covenants--Limitation on Indebtedness' at the time of such Designation (assuming
the effectiveness thereof). In the event of any such Designation, the Issuer
shall be deemed to have made an Investment constituting a Restricted Payment
pursuant to the covenant described under '--Certain Covenants--Limitation on
Restricted Payments' for all purposes of the Indenture in the Designation
Amount. The Board of Directors may revoke (a 'Revocation') any Designation of a
Subsidiary as an Unrestricted Subsidiary if: (a) no Default shall have occurred
and be continuing at the time of and after giving effect to such Revocation; (b)
the Issuer could Incur $1.00 of additional Indebtedness under paragraph (a) of
the covenant described under '--Certain Covenants--Limitation on Indebtedness'
at the time of such Revocation (assuming the effectiveness thereof); and (c) all
Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately
following such Revocation would, if Incurred at such time, have been permitted
to be Incurred under the Indenture. Any Designation or Revocation must be
evidenced by a Board Resolution certifying compliance with the foregoing
provisions.
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The Issuer shall not, and shall not permit any Restricted Subsidiary to, at
any time (i) provide a Guarantee of any Indebtedness of any Unrestricted
Subsidiary, (ii) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary or (iii) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the occurrence
of a default with respect to any Indebtedness of any Unrestricted Subsidiary
(including any right to take enforcement action against such Unrestricted
Subsidiary), except in the case of clause (i) or (ii) to the extent permitted
under the covenant described under '--Certain Covenants--Limitation on
Restricted Payments.' No Unrestricted Subsidiary shall at any time Guarantee any
obligation of the Issuer or any Restricted Subsidiary.
'U.S. Government Obligations' means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
'U.S. Restricted Subsidiary' means any Restricted Subsidiary of the Issuer
(a) organized under the laws of the United States of America, any state thereof
or the District of Columbia or (b) a majority of the assets (excluding equity
investments in other Persons) of which are located in the United States of
America based on the Fair Market Value of such assets (as determined in good
faith by the Board of Directors).
'U.S. Significant Subsidiary' means any U.S. Restricted Subsidiary (other
than any Note Guarantor) that individually is, or taken together with other U.S.
Restricted Subsidiaries (other than any Note Guarantor) would be, a Significant
Restricted Subsidiary.
'Voting Stock' means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers,
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
'Wholly Owned Non-U.S. Subsidiary' means a Non-U.S. Restricted Subsidiary
of the Issuer all the Capital Stock of which (other than nominal directors'
qualifying shares) is owned by the Issuer or another Wholly Owned Non-U.S.
Subsidiary.
'Wholly Owned Subsidiary' means a Restricted Subsidiary of the Issuer all
the Capital Stock of which (other than nominal directors' qualifying shares) is
owned by the Issuer or another Wholly Owned Subsidiary.
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UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
'Purchase Agreement') to be entered into among the Company and each of Merrill
Lynch, Pierce, Fenner & Smith Incorporated ('Merrill Lynch'), CS First Boston
Corporation, Lehman Brothers Inc. and Scotia Capital Markets (USA) Inc.
(collectively, the 'Underwriters'), the Company has agreed to sell to each of
the Underwriters and each of the Underwriters has agreed to purchase from the
Company the aggregate principal amount of the Notes set forth opposite its name
below. The Purchase Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the Notes if any are purchased.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................... $
CS First Boston Corporation..................
Lehman Brothers Inc..........................
Scotia Capital Markets (USA) Inc.............
------------
Total........................... $115,000,000
------------
------------
</TABLE>
The Underwriters propose to offer the Notes to the public at the public
offering price set forth on the cover page of this Prospectus, and to certain
dealers at such price less a concession not in excess of % of the principal
amount of the Notes. The Underwriters may allow, and such dealers may reallow, a
discount not in excess of % of the principal amount of the Notes to certain
other dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
There is no public trading market for the Notes and the Company does not
intend to apply for listing of the Notes on any national securities exchange or
for quotation of the Notes on any automated dealer quotation system. The Company
has been advised by the Underwriters that they presently intend to make a market
in the Notes after the consummation of the Offering contemplated hereby,
although they are under no obligation to do so and may discontinue any
market-making activities at any time without any notice. No assurance can be
given as to the liquidity of the trading market for the Notes or that an active
public market for the Notes will develop. If an active public trading market for
the Notes does not develop, the market price and liquidity of the Notes may be
adversely affected. If the Notes are traded, they may trade at a discount from
their initial offering price, depending on prevailing interest rates, the market
for similar securities, the performance of the Company and certain other
factors.
Holding and the Company have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act, and
contribute to payments that the Underwriters may be required to make in respect
thereof.
Holding and the Company have agreed that they will not, without the prior
consent of Merrill Lynch, for a period of 180 days after the date of this
Prospectus, directly or indirectly, issue, sell or offer to sell, grant any
option for the sale of, or otherwise dispose of, or register for sale by others,
any debt securities, other than the initial sale of Notes, and indebtedness
under the Credit Agreement.
The Offering is contingent upon the assumption by Mettler-Toledo, Inc. of
all liabilities under the Securities Act of 1933, as amended, of MT Acquisition
Corp., as issuer of the Notes, which assumption will be executed simultaneously
with the issuance of the Notes.
Merrill Lynch is an affiliate of Merrill Lynch Capital, which is sole and
exclusive arranger and documentation agent to the Company for, and will be a
lender to the Company under, the Credit Agreement. Merrill Lynch Capital will
receive customary fees in connection with the Credit Agreement. In addition,
Merrill Lynch Capital has committed to provide a bridge loan to the Company in
connection with the financing of the Acquisition if the Offering of the Notes is
not completed and will receive customary fees in connection therewith. CS First
Boston Corporation is an affiliate of Credit Suisse, which will be a co-agent
and a lender to the Company under the Credit Agreement. Credit Suisse will
receive customary fees in connection with the Credit Agreement. CS First Boston
Corporation is also an affiliate of CS First Boston Limited, which has acted as
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financial adviser to Ciba in connection with the Acquisition, for which it will
receive customary fees. In addition, CS First Boston Corporation, or its
affiliates, renders investment banking and financial advisory services to Ciba
and its affiliates from time to time. Lehman Brothers Inc. is an affiliate of
Lehman Commercial Paper Inc., which will be a co-agent and a lender to the
Company under the Credit Agreement. Lehman Commercial Paper Inc. will receive
customary fees in connection with the Credit Agreement. Scotia Capital Markets
(USA) Inc. is an affiliate of The Bank of Nova Scotia, which will be
administrative agent and a lender to the Company under the Credit Agreement. The
Bank of Nova Scotia will receive customary fees in connection with the Credit
Agreement.
The Underwriters have informed the Company that they do not expect
discretionary sales by the Underwriters to exceed 5.0% of the principal amount
being offered hereby.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the
Company by Fried, Frank, Harris, Shriver & Jacobson (a partnership including
professional corporations), New York, New York. Certain legal matters relating
to the Notes offered hereby will be passed upon for the Underwriters by
Debevoise & Plimpton, New York, New York.
INDEPENDENT AUDITORS
The combined financial statements of the Mettler-Toledo Group as of
December 31, 1994 and 1995 and for each of the years in the three-year period
ended December 31, 1995 and the balance sheet of MT Acquisition Corp. as of July
16, 1996 and consolidated balance sheet of Mettler-Toledo Holding Inc. as of
July 16, 1996, included in this Prospectus, have been audited by KPMG Fides
Peat, independent auditors, as set forth in their reports appearing elsewhere
herein and are included in reliance upon such reports given upon the authority
of such firm as experts in accounting and auditing.
AVAILABLE INFORMATION
Holding and the Issuer have filed with the Securities and Exchange
Commission (the 'Commission') a Registration Statement (which term shall
encompass any amendment thereto) on Form S-1 under the Securities Act with
respect to the Notes being offered hereby. This Prospectus does not contain all
the information set forth in the Registration Statement and the exhibits and
schedules thereto, to which reference is hereby made. Statements made in this
Prospectus as to the contents of any documents filed as exhibits to the
Registration Statement are necessarily summaries of such documents, and each
such statement is qualified in its entirety by reference to the copy of the
applicable document filed as an exhibit to the Registration Statement. The
Registration Statement and the exhibits and schedules thereto filed by Holding
and the Issuer with the Commission may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, New York,
New York 10048 and Suite 1400, Northwestern Atrium Center, 14th Floor, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can also be
obtained at prescribed rates by writing to the Commission, Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission
maintains a Web site (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding registrants, such as
Holding and the Issuer, that file electronically with the Commission.
The Indenture provides that, notwithstanding that the Issuer may not be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the 'Exchange Act'), to the
extent permitted by the Exchange Act or the interpretations of the Commission in
respect thereof, the Issuer will file with the Commission and provide the
Trustee with the annual reports and the information, documents and other reports
that are specified in Sections 13 and 15(d) of the Exchange Act. In the event
that the Issuer is not permitted to file such reports, documents and information
with the Commission, the Issuer will provide substantially similar information
to the Trustee and holders and prospective holders of the Notes (upon request)
as if the Issuer were subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act.
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INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
METTLER-TOLEDO GROUP
Audited Combined Financial Statements:
Independent Auditors' Report....................................... F-2
Combined Statements of Net Assets as of December 31, 1994 and
1995.............................................................. F-3
Combined Statements of Operations for the years ended December 31,
1993, 1994 and 1995............................................... F-4
Combined Statements of Changes in Net Assets for the years ended
December 31, 1993, 1994 and 1995.................................. F-5
Combined Statements of Cash Flows for the years ended December 31,
1993, 1994 and 1995............................................... F-6
Notes to Combined Financial Statements for the years ended December
31, 1993, 1994
and 1995......................................................... F-7
Unaudited Interim Combined Financial Statements:
Interim Combined Statements of Net Assets as of December 31, 1995
and June 30, 1996................................................. F-22
Interim Combined Statements of Operations for the six months ended
June 30, 1995 and 1996............................................ F-23
Interim Combined Statements of Changes in Net Assets for the six
months ended June 30, 1995 and 1996............................... F-24
Interim Combined Statements of Cash Flows for the six months ended
June 30, 1995 and 1996............................................ F-25
Notes to the Interim Combined Financial Statements for the six
months ended June 30, 1995
and 1996......................................................... F-26
MT ACQUISITION CORP.
Independent Auditors' Report.......................................... F-27
Balance Sheet as of July 16, 1996..................................... F-28
Notes to Balance Sheet as of July 16, 1996............................ F-29
METTLER-TOLEDO HOLDING INC.
Independent Auditors' Report.......................................... F-30
Consolidated Balance Sheet as of July 16, 1996........................ F-31
Notes to Consolidated Balance Sheet as of July 16, 1996............... F-32
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Ciba-Geigy AG
We have audited the accompanying combined statements of net assets of the
Mettler-Toledo Group (as defined in Note 1) as of December 31, 1994 and 1995,
and the related combined statements of operations, changes in net assets and
cash flows for each of the years in the three-year period ended December 31,
1995. These combined financial statements are the responsibility of the Group's
management. Our responsibility is to express an opinion on these combined
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of the
Mettler-Toledo Group as of December 31, 1994 and 1995, and the combined results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1995 in conformity with generally accepted accounting
principles in the United States of America.
KPMG FIDES PEAT
Zurich, Switzerland
February 5, 1996
F-2
<PAGE>
METTLER-TOLEDO GROUP
COMBINED STATEMENTS OF NET ASSETS
AS OF DECEMBER 31, 1994 AND 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................ $ 63,802 $ 41,402
Due from Ciba and affiliates (Note 3)................ 18,688 33,072
Trade accounts receivable, net (Note 4).............. 139,315 159,218
Inventories (Note 5)................................. 105,001 110,986
Deferred taxes (Note 15)............................. 6,830 6,180
Other current assets (Note 7)........................ 17,755 21,469
-------- --------
Total current assets.............................. 351,391 372,327
Property, plant and equipment, net (Note 8)............ 230,033 241,018
Goodwill, net (Note 9)................................. 86,833 84,425
Long-term deferred taxes (Note 15)..................... 10,882 14,312
Other assets (Notes 10, 14)............................ 4,059 12,012
-------- --------
Total assets...................................... $683,198 $724,094
-------- --------
-------- --------
LIABILITIES AND NET ASSETS
Current liabilities:
Trade accounts payable............................... $ 31,126 $ 34,389
Accrued and other liabilities (Note 12).............. 86,672 107,118
Taxes payable........................................ 10,596 11,737
Deferred taxes (Note 15)............................. 7,921 7,698
Bank and other loans (Note 11)....................... 24,947 29,513
Notes payable to Ciba and affiliates (Note 13)....... 64,064 91,132
-------- --------
Total current liabilities......................... 225,326 281,587
Long-term debt payable to Ciba and affiliates (Note
13).................................................. 132,275 145,097
Long-term debt due to third parties (Note 13).......... 862 3,621
Long-term deferred taxes (Note 15)..................... 10,222 13,502
Other long-term liabilities (Note 14).................. 83,964 84,303
-------- --------
Total liabilities................................. 452,649 528,110
Minority interest...................................... 2,355 2,730
Net assets:
Capital employed..................................... 218,129 162,604
Currency translation adjustment...................... 10,065 30,650
-------- --------
Total net assets.................................. 228,194 193,254
-------- --------
Commitments and contingencies (Note 18)
Total liabilities and net assets.................. $683,198 $724,094
-------- --------
-------- --------
</TABLE>
See the accompanying notes to the combined financial statements
F-3
<PAGE>
METTLER-TOLEDO GROUP
COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
Net sales.................................... $ 728,958 $ 769,136 $ 850,415
Cost of sales................................ 443,534 461,629 508,089
--------- --------- ---------
Gross profit............................... 285,424 307,507 342,326
Research and development expenses............ 46,438 47,994 54,542
Marketing and selling expenses............... 141,717 152,631 167,396
General and administrative expenses.......... 68,357 76,248 81,167
Amortization of goodwill..................... 2,535 2,536 2,529
Other charges (income), net (Note 16)........ 18,284 (2,852) (701)
--------- --------- ---------
Income from operations..................... 8,093 30,950 37,393
Interest expense (Note 13)................... 15,239 13,307 18,219
Financial income, net (Note 17).............. 4,174 4,864 8,630
--------- --------- ---------
Income (loss) before taxes and minority
interest................................ (2,972) 22,507 27,804
Provision for taxes (Note 15)................ 3,041 8,676 8,782
Minority interest............................ 1,140 347 768
--------- --------- ---------
Net income (loss).......................... $ (7,153) $ 13,484 $ 18,254
--------- --------- ---------
--------- --------- ---------
</TABLE>
See the accompanying notes to the combined financial statements
F-4
<PAGE>
METTLER-TOLEDO GROUP
COMBINED STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
CURRENCY
CAPITAL TRANSLATION
EMPLOYED ADJUSTMENT TOTAL
-------- ---------- --------
<S> <C> <C> <C>
Net assets at January 1, 1993................ $216,256 $ 36 $216,292
Capital transactions with Ciba and
affiliates................................. (6,460) -- (6,460)
Net loss..................................... (7,153) -- (7,153)
Change in currency translation adjustment.... -- (9,158) (9,158)
-------- ---------- --------
Net assets at December 31, 1993.............. 202,643 (9,122) 193,521
Capital transactions with Ciba and
affiliates................................. 2,002 -- 2,002
Net income................................... 13,484 -- 13,484
Change in currency translation adjustment.... -- 19,187 19,187
-------- ---------- --------
Net assets at December 31, 1994.............. 218,129 10,065 228,194
Capital transactions with Ciba and
affiliates................................. (73,779) -- (73,779)
Net income................................... 18,254 -- 18,254
Change in currency translation adjustment.... -- 20,585 20,585
-------- ---------- --------
Net assets at December 31, 1995.............. $162,604 $ 30,650 $193,254
-------- ---------- --------
-------- ---------- --------
</TABLE>
See the accompanying notes to the combined financial statements
F-5
<PAGE>
METTLER-TOLEDO GROUP
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)......................................... $ (7,153) $ 13,484 $ 18,254
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation......................................... 26,674 27,681 30,598
Amortization of goodwill............................. 2,535 2,536 2,529
Amortization and write-down of other intangibles..... 382 3,901 236
Net gain on disposal of long-term assets............. (305) (1,396) (1,053)
Deferred taxes....................................... (2,881) 740 (551)
Minority interest.................................... 1,140 347 768
Increase (decrease) in cash resulting from changes
in:
Trade accounts receivable, net.................... (4,765) (7,410) (9,979)
Inventories....................................... 1,218 (574) (607)
Other current assets.............................. (1,596) 1,636 (3,058)
Trade accounts payable............................ (1,728) (1,123) 1,437
Accruals and other liabilities, net............... 8,935 (5,728) 13,095
-------- -------- --------
Net cash provided by operating activities....... 22,456 34,094 51,669
-------- -------- --------
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment....... 3,799 12,454 4,000
Purchase of property, plant and equipment................. (25,122) (24,916) (25,858)
Investments in other long term assets, net................ (2,534) 162 (7,484)
-------- -------- --------
Net cash used in investing activities........... (23,857) (12,300) (29,342)
-------- -------- --------
Cash flows from financing activities:
Borrowings (repayments) of third party debt............... (2,384) (311) 3,983
Ciba and affiliates borrowings (repayments)............... 16,660 (9,187) (15,693)
Capital transactions with Ciba and affiliates............. (6,460) 2,002 (37,361)
-------- -------- --------
Net cash provided by (used in) financing
activities................................... 7,816 (7,496) (49,071)
-------- -------- --------
Effect of exchange rate changes on cash and cash
equivalents............................................... 2,275 10,040 4,344
-------- -------- --------
Net increase (decrease) in cash and cash equivalents........ 8,690 24,338 (22,400)
Cash and cash equivalents:
Beginning of year......................................... 30,774 39,464 63,802
-------- -------- --------
End of year............................................... $ 39,464 $ 63,802 $ 41,402
-------- -------- --------
-------- -------- --------
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest............................................... $ 13,867 $ 13,225 $ 18,927
Taxes.................................................. 6,147 9,370 9,970
Non-cash financing and investing activities:
Due to Ciba for capital transactions (Note 13)............ $ 36,418
</TABLE>
See the accompanying notes to the combined financial statements
F-6
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
1. BASIS OF PRESENTATION
The accompanying combined financial statements have been prepared in
accordance with United States generally accepted accounting principles ('U.S.
GAAP') on a basis which reflects the combined assets and liabilities ('net
assets') and sales, costs of sales and other income and expenses ('operations')
and cash flows of the companies constituting the Mettler-Toledo Group
('Mettler-Toledo' or the 'Group'). The Group represents the following entities
(including their respective subsidiaries) owned by Ciba-Geigy AG ('Ciba')
assuming that the Group was organized as a separate legal entity for all periods
presented (Ciba ownership percentage is 100% unless otherwise indicated):
<TABLE>
<CAPTION>
JURISDICTION
ENTITY OF ORGANIZATION
- ----------------------------------------------------- -------------------------
<S> <C>
Mettler-Toledo (Holding) Deutschland GmbH............ Germany
MARKET ORGANIZATIONS--EUROPE
Mettler-Toledo GmbH.................................. Germany
Mettler-Toledo Sp. z.o.o........................... Poland
Getmore Gesellschaft fur Marketing & Media Service
GmbH............................................ Germany
Ohaus Waagen Vertriebsgesellschaft mbH............. Germany
Mettler-Toledo SA.................................... France
Ohaus S.a.r.l...................................... France
Mettler-Toledo Ltd................................... United Kingdom
Ohaus Europe, Branch of Ohaus US..................... United Kingdom
Mettler-Toledo (Schweiz) AG.......................... Switzerland
N.V. Mettler-Toledo SA............................... Belgium
Mettler-Toledo BV.................................... Netherlands
Mettler-Toledo S.p.A. (including Grandi Impianti
Mettler-Toledo S.r.l.--52% ownership by Ciba)...... Italy
Mettler-Toledo S.A.E................................. Spain
Mettler-Toledo AB.................................... Sweden
Mettler-Toledo A/S................................. Norway
Mettler-Toledo A/S................................. Denmark
Mettler-Toledo Gesellschaft mbH...................... Austria
Mettler-Toledo spol. s.r.o......................... Slovakia
Mettler-Toledo Service s.r.o....................... Slovakia
Mettler-Toledo spol, s.r.o......................... Czech Republic
Mettler-Toledo Kereskedelmi Kft.................... Hungary
Mettler-Toledo d.o.o............................... Slovenia
Mettler-Toledo d.o.o............................... Croatia
Mettler-Toledo Analyse Industrielle S.ar.l........... France
PRODUCING ORGANIZATIONS--EUROPE
Mettler-Toledo AG.................................... Switzerland
Mettler-Toledo (Albstadt) GmbH....................... Germany
Garvens Automation GmbH.............................. Germany
</TABLE>
F-7
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
1. BASIS OF PRESENTATION--(CONTINUED)
<TABLE>
<CAPTION>
JURISDICTION
ENTITY OF ORGANIZATION
- ----------------------------------------------------- -------------------------
AMERICAN COMPANIES
<S> <C>
Mettler-Toledo, Inc.................................. United States
Mettler-Toledo Inc................................... Canada
Hi-Speed Checkweigher Co., Inc....................... United States
Mettler-Toledo S.A. de C.V........................... Mexico
Mettler-Toledo Process Analytical Inc................ United States
Ohaus Corporation.................................... United States
Ohaus de Mexico S.A. de C.V.......................... Mexico
Mettler-Toledo Industria e Comercio Ltda.(1)......... Brazil
ASIAN AND PACIFIC COMPANIES
Mettler-Toledo Ltd.(2)............................... Australia
Toledo Scale (HK) Ltd................................ Hong Kong
Mettler-Toledo Instruments (Shanghai) Ltd............ Peoples Republic of China
Mettler-Toledo International Trading (Shanghai)
Corp............................................ Peoples Republic of China
Changzhou Toledo Electronic Scale Ltd. (60% ownership
by Ciba)........................................... Peoples Republic of China
Mettler-Toledo (S.E.A.) Pte. Ltd..................... Singapore
Mettler-Toledo K.K................................... Japan
Mettler-Toledo (M) Sdn. Bhd.......................... Malaysia
Mettler-Toledo (Thailand)(3)......................... Thailand
OTHER COMPANIES
Mettler-Toledo Pac Rim AG............................ Switzerland
Microwa Prazisionswaagen AG.......................... Switzerland
</TABLE>
- ------------------
(1) Subsidiary of Mettler-Toledo AG.
(2) Subsidiary of Mettler-Toledo, Inc.
(3) Division of Ciba as of December 31, 1995. A separate legal entity formed in
1996.
- ------------------
In the opinion of management of the Group, the accompanying combined
financial statements include all material expenses that the Mettler-Toledo Group
would have incurred had it been operating as an independent entity for all
periods presented.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
The Mettler-Toledo Group is a manufacturer and marketer of weighing
instruments for use in laboratory, industrial and food retailing applications.
The Group also manufacturers and sells certain related laboratory
F-8
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
measurement instruments. The Group's manufacturing facilities are located in
Switzerland, the United States, Germany and China. The Group's principal
executive offices are located in Greifensee, Switzerland.
Principles of Combination
The combined financial statements include the entities listed in Note 1.
All transactions and balances between the Companies listed in Note 1 have been
eliminated.
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments with original
maturity dates of three months or less.
Inventories
Inventories are valued at the lower of cost or market. Cost, which includes
direct materials, labor and overhead plus indirect overhead, is determined using
the first in, first out (FIFO) or weighted average cost methods and to a lesser
extent the last in, first out (LIFO) method.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated
depreciation. Depreciation is charged on a straight line basis over the
estimated useful lives of the assets as follows:
<TABLE>
<S> <C>
Buildings and improvements.... 15 to 50 years
Machinery and equipment....... 3 to 12 years
Computer software............. 3 years
Leasehold improvements........ Shorter of useful life or lease term
</TABLE>
Beginning January 1, 1996 the Group adopted Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 121 (SFAS 121),
'Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of'. SFAS 121 requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. In addition, SFAS 121
requires that long-lived assets and certain identifiable intangibles to be
disposed of be reported at the lower of carrying amount or fair value less cost
to sell. Adoption of SFAS 121 had no effect on the combined financial
statements.
Goodwill
Goodwill, which represents the excess of purchase price over the fair value
of net assets acquired, is amortized on a straight-line basis over 40 years
being the expected period to be benefited. The Group assesses the recoverability
of goodwill by determining whether the amortization of the goodwill balance over
its remaining life can be recovered from the undiscounted future operating cash
flows of the acquired operation. The amount of goodwill impairment, if any, is
measured based on projected discounted future operating cash flows using a
discount rate commensurate with the risks involved. The assessment of the
recoverability of goodwill will be impacted if estimated future operating cash
flows are not achieved.
F-9
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Taxation
The Group files its own tax returns in each jurisdiction in which it
operates, except in certain jurisdictions where it files jointly with other Ciba
subsidiaries. The Group has a tax sharing arrangement with Ciba in these
countries to share the tax burden or benefits. Such arrangement results in each
company's tax burden or benefit equating to that which it would have incurred or
received if it had been filing a separate tax return.
Taxes are accounted for under the asset and liability method. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates in the respective jurisdictions in which the
Group operates that are expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred income tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
Generally, deferred taxes are not provided on the unremitted earnings of
subsidiaries outside of Switzerland because it is expected that these earnings
are permanently reinvested. Such earnings may become taxable upon the sale or
liquidation of these subsidiaries or upon the remittance of dividends. Deferred
taxes are provided in situations where the Group's subsidiaries plan to make
future dividend distributions.
Research and Development
Research and development costs are expensed as incurred. Research and
development costs, including customer engineering (which represents research and
development funded by customers and, accordingly, is included in cost of sales),
amounted to approximately $52,600, $55,600 and $62,400 during 1993, 1994 and
1995, respectively.
Currency Translation and Transactions
The reporting currency for the combined financial statements of the Group
is the United States dollar (USD). The functional currency for the Group's
operations is generally the applicable local currency. Accordingly, the assets
and liabilities of companies whose functional currency is other than the USD are
included in the combination by translating the assets and liabilities into the
reporting currency at the exchange rates applicable at the end of the reporting
year. The statements of operations and cash flows of such non-USD functional
currency operations are translated at the monthly average exchange rates during
the year. Translation gains or losses are accumulated as a separate component of
net assets. Currency transaction gains or losses arising from transactions of
Group companies in currencies other than the functional currency are included in
operations at each reporting period.
Derivative Financial Instruments
The Group has only limited involvement with derivative financial
instruments and does not use them for trading purposes. Derivative financial
instruments in the form of currency forward and option contracts are entered
into by the Group primarily as a hedge against anticipated currency exposures.
Such contracts limit the Group's exposure to both favorable and unfavorable
currency fluctuations. These contracts are adjusted to reflect market values as
of each balance sheet date, with the resulting unrealized gains and losses being
recognized in financial income or expense, as appropriate.
F-10
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Fair Value of Financial Instruments
The carrying amount of cash and cash equivalents, accounts receivable,
other current assets and current liabilities approximates fair market value
because of the short term maturity of these financial instruments. It is not
practical to determine the fair value of balances with Ciba due to the related
party nature of these financial instruments. Other financial instruments are not
significant to the combined financial statements.
Concentration of Credit Risk
The Group's revenue base is widely diversified by geographic region and by
individual customer. The Group's products are utilized in many different
industries, although extensively in the pharmaceutical and chemical industries.
The Group performs ongoing credit evaluations of its customers' financial
condition and, generally, requires no collateral from its customers.
Revenue Recognition
Revenue is recognized when title to a product has transferred or services
have been rendered. Revenues from service contracts are recognized on a
straight-line basis over the contract period.
Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, as well as disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results may differ from those
estimates.
3. DUE FROM CIBA AND AFFILIATES, NET
The amount due from Ciba, net is comprised of the following:
<TABLE>
<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Cash pool deposits..................................... $18,688 $22,239
Due from AG fur Prazisionsinstrumente ('AGP'), a
subsidiary of Ciba, 6.5%, revolving repayment
terms................................................ -- 10,833
------- -------
$18,688 $33,072
------- -------
------- -------
</TABLE>
Certain Group operating units participate in an arrangement with Ciba
whereby excess cash is pooled into an account maintained by Ciba. The net
deposit with Ciba in connection with this arrangement bears interest at the
short-term money market rates available to Ciba.
Ciba performs certain limited administrative services on behalf of the
Group. The cost of such services, which has not been charged to the Group nor
included in the combined financial statements, would not be significant.
F-11
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
4. TRADE ACCOUNTS RECEIVABLE, NET
Trade accounts receivable, net, consisted of the following at December 31:
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Trade accounts receivable............... $146,726 $168,510
Allowance for doubtful accounts......... (7,411) (9,292)
-------- --------
$139,315 $159,218
-------- --------
-------- --------
</TABLE>
5. INVENTORIES
Inventories consisted of the following at December 31:
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Raw materials and parts................. $ 46,305 $ 45,523
Work in progress........................ 30,689 38,191
Finished goods.......................... 30,564 30,149
-------- --------
107,558 113,863
LIFO reserve............................ (2,557) (2,877)
-------- --------
$105,001 $110,986
-------- --------
-------- --------
</TABLE>
At December 31, 1994 and 1995, 9.2% and 8.8%, respectively, of the
Company's inventories (certain U.S. companies only) were valued using the LIFO
method of accounting. There were no material liquidations of LIFO inventories
during the periods presented.
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISKS
The Group may be exposed to credit losses in the event of nonperformance by
the counterparties to its currency forward and option contracts. The Group has
no reason to believe, however, that such counterparties will not be able to
fully satisfy their obligations under these contracts.
At December 31, 1994, the Group had contracts maturing during 1995 to
purchase the equivalent of approximately $130 and to sell the equivalent of
approximately $25,700 in various currencies. At December 31, 1995, the Group had
currency forward and option contracts maturing during 1996 to purchase the
equivalent of approximately $23,300 and to sell the equivalent of approximately
$27,900 in various currencies. These contracts were used to limit its exposure
to currency fluctuations on anticipated future cash flows, primarily for the
delivery and receipt of United States dollars, German marks, and Japanese yen in
exchange for Swiss francs.
At December 31, 1994 and 1995, the fair value of such financial
instruments, which the Group recognized as net unrealized gains, was
approximately $590 and $2,400, respectively.
7. OTHER CURRENT ASSETS
Other current assets consisted of the following at December 31:
<TABLE>
<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Prepaid expenses....................................... $ 4,273 $ 4,703
Other (including net gains on derivative financial
instruments)......................................... 13,482 16,766
------- -------
$17,755 $21,469
------- -------
------- -------
</TABLE>
F-12
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
8. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net, consisted of the following at
December 31:
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Land.............................................. $ 28,488 $ 31,535
Buildings and leasehold improvements.............. 166,281 186,608
Machinery and equipment........................... 218,824 237,457
Computer software................................. 4,114 5,373
-------- --------
417,707 460,973
Less accumulated depreciation and amortization.... (187,674) (219,955)
-------- --------
$230,033 $241,018
-------- --------
-------- --------
</TABLE>
9. GOODWILL, NET
Goodwill, net, consists of the following at December 31:
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Cost.......................... $101,572 $101,693
Accumulated amortization...... (14,739) (17,268)
-------- --------
$ 86,833 $ 84,425
-------- --------
-------- --------
</TABLE>
10. OTHER ASSETS
Other assets consisted of the following at December 31:
<TABLE>
<CAPTION>
1994 1995
------ -------
<S> <C> <C>
Bank deposits--restricted cash.......... $1,145 $ 4,697
Secured loans........................... 1,165 2,911
Other................................... 1,749 4,404
------ -------
$4,059 $12,012
------ -------
------ -------
</TABLE>
Bank deposits--restricted cash at December 31, 1994 and 1995 represented
amounts restricted as to use under Switzerland tax law and, in 1995, deposits
collateralizing a letter of credit given by a financial institution in
connection with one of the Company's subsidiaries in the Peoples Republic of
China.
11. BANK AND OTHER LOANS
Bank and other loans consisted of the following at December 31:
<TABLE>
<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Bank overdraft liability................ $15,005 $16,977
Borrowings under line of credit......... 9,161 10,105
Other................................... 781 2,431
------- -------
$24,947 $29,513
------- -------
------- -------
</TABLE>
The weighted average interest rate on the borrowings under line of credit
was approximately 6.6% and 8.0% at December 31, 1994 and 1995, respectively. The
Group had available unused bank lines of credit for short-term financing of
approximately $72,000 at December 31, 1995.
F-13
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
12. ACCRUED AND OTHER LIABILITIES
Accrued and other liabilities consisted of the following at December 31:
<TABLE>
<CAPTION>
1994 1995
------- --------
<S> <C> <C>
Accrued payroll and vacation................. $22,620 $ 26,400
Social benefits and payroll taxes............ 8,830 9,563
Other taxes payable.......................... 4,318 8,190
Warranty..................................... 5,633 6,420
Other liabilities............................ 45,271 56,545
------- --------
$86,672 $107,118
------- --------
------- --------
</TABLE>
Warranties on Mettler-Toledo products are generally for one year. The Group
provides for warranty costs, which have not been significant, based on
historical experience.
13. DEBT
The Group's debt obligations consist of the following at December 31:
Short-term notes payable to Ciba and affiliates:
<TABLE>
<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Unsecured notes payable:
AGP, 4.25%, due February 29,1996 (renewable)......... $ -- $26,517
Ciba, 7.56%, due December 20, 1995................... 20,000 --
Due to Ciba for capital transactions................... -- 36,418
Due to AGP, 6.5%, revolving repayment terms............ 28,603 --
Other unsecured short-term debt to Ciba, varying
interest rates and maturities........................ 15,461 28,197
------- -------
$64,064 $91,132
------- -------
------- -------
</TABLE>
Long-term debt payable to Ciba and affiliates:
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Unsecured notes payable:
AGP, 8.4%, due December 20, 1999..................... $ -- $122,000
AGP, 6%, due December 20, 1999....................... -- 20,000
Ciba, 8.4%, due December 20, 1999
(refinanced during 1995).......................... 122,000 --
Other unsecured long-term debt to Ciba, varying
interest rates and maturities........................ 10,275 3,097
-------- --------
$132,275 $145,097
-------- --------
-------- --------
</TABLE>
Long-term debt payable to third parties at December 31, 1994 and 1995 was
$862 and $3,621, respectively.
Interest expense consists of the following for the years ended December 31:
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Ciba........... $13,402 $10,506 $15,693
Third-party.... 1,837 2,801 2,526
------- ------- -------
$15,239 $13,307 $18,219
------- ------- -------
------- ------- -------
</TABLE>
F-14
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
14. BENEFIT PLANS
Mettler-Toledo maintains a number of retirement plans for the benefit of
its employees.
Certain group companies sponsor defined contribution plans. Benefits are
determined and funded annually based upon the terms of the plans. Contributions
under these plans amounted to $8,455, $9,042, and $9,413, in 1993, 1994 and
1995, respectively.
Certain group companies sponsor defined benefit plans. Benefits are also
provided to employees under defined benefit plans primarily based upon years of
service and employees' compensation for certain periods during the last years of
employment.
The following table sets forth the funded status and amounts recognized in
the combined financial statements for the Group's principal defined benefit
plans at December 31, 1994 and 1995:
<TABLE>
<CAPTION>
1994 1995
------------------------------- -------------------------------
ASSETS EXCEED ACCUMULATED ASSETS EXCEED ACCUMULATED
ACCUMULATED BENEFITS EXCEED ACCUMULATED BENEFITS EXCEED
BENEFITS ASSETS BENEFITS ASSETS
------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
Actuarial present value of accumulated
benefit obligations:
Vested benefits....................... $(8,247) $ (73,144) $ (8,582) $ (90,698)
Non-vested benefits................... (229) (4,279) (90) (3,122)
------------- --------------- ------------- ---------------
(8,476) (77,423) (8,672) (93,820)
------------- --------------- ------------- ---------------
Projected benefit obligations........... (9,166) (90,028) (10,737) (100,820)
Plan assets at fair value............... 10,135 28,414 10,546 40,091
------------- --------------- ------------- ---------------
Plan assets in excess of (less than)
projected benefit obligations......... 969 (61,614) (191) (60,729)
Unrecognized prior service cost
(benefit)............................. 502 1,103 183 (252)
Unrecognized net losses................. 66 1,265 188 247
Unrecognized transition obligations..... -- 3,835 -- 3,851
------------- --------------- ------------- ---------------
Prepaid (accrued) pension costs......... $ 1,537 $ (55,411) $ 180 $ (56,883)
------------- --------------- ------------- ---------------
------------- --------------- ------------- ---------------
</TABLE>
The prepaid (accrued) pension costs are recognized in the accompanying
combined financial statements as other long-term assets and other long term
liabilities, respectively.
The assumed discount rates and rates of increase in future compensation
level used in calculating the projected benefit obligations vary according to
the economic conditions of the country in which the retirement plans are
situated. The range of rates used for the purposes of the above calculations
are:
<TABLE>
<CAPTION>
1994 1995
------------- -------------
<S> <C> <C>
Discount rates................ 6.5% to 9.0% 6.5% to 8.0%
Compensation increase rates... 2.5% to 7.0% 2.5% to 6.0%
</TABLE>
The expected long term rates of return on plan assets ranged between 9.0%
and 9.3% for 1993, 9.5% and 11.0% in 1994, and 9.5% and 10.0% for 1995.
The assumptions used above have a significant effect on the reported
amounts of projected benefit obligations and net periodic pension cost. For
example, increasing the assumed discount rate would have the effect of
decreasing the projected benefit obligation and increasing unrecognized net
gains.
F-15
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
14. BENEFIT PLANS--(CONTINUED)
Increasing the assumed compensation increase rate would increase the
projected benefit obligation and decrease unrecognized net gains. Increasing the
expected long-term rate of return on investments would decrease unrecognized net
gains.
Plan assets relate principally to the Group's U.S. companies and consist of
equity investments, obligations of the U.S. Treasury or other governmental
agencies, and other interest-bearing investments.
Net periodic pension cost for all of the plans above includes the following
components:
<TABLE>
<CAPTION>
1993 1994 1995
------ ------- -------
<S> <C> <C> <C>
Service cost (benefits earned during the
period).................................... $3,722 $ 3,833 $ 3,668
Interest cost on projected benefit
obligations................................ 6,055 6,426 7,561
Actual return on plan assets................. (3,609) (2,725) (8,653)
Net amortization and deferral................ 1,012 (170) 5,137
------ ------- -------
Net periodic pension expense................. $7,180 $ 7,364 $ 7,713
------ ------- -------
------ ------- -------
</TABLE>
The Group's U.S. operations provide postretirement medical benefits to
their employees. Employee contributions for medical benefits are related to
employee years of service.
The following table sets forth the status of the U.S. postretirement plans
and amounts recognized in the Group's combined financial statements at December
31, 1994 and 1995:
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Accumulated postretirement benefit obligations:
Retired...................................... $(27,837) $(27,682)
Fully eligible............................... (1,252) (1,196)
Other........................................ (2,547) (2,361)
-------- --------
(31,636) (31,239)
Unrecognized net loss.......................... 5,714 6,261
Unrecognized prior service benefit............. -- (692)
Unrecognized transition obligation............. 1,471 1,389
-------- --------
Accrued postretirement benefit cost............ $(24,451) $(24,281)
-------- --------
-------- --------
</TABLE>
Net periodic postretirement benefit cost for the above plans includes the
following components:
<TABLE>
<CAPTION>
1993 1994 1995
------- ------ ------
<S> <C> <C> <C>
Service cost (benefits earned during the
period)......................................... $ 296 $ 333 $ 285
Interest cost on accumulated postretirement
benefit obligations............................. 2,053 2,193 2,371
Net amortization and deferral..................... 82 82 99
------- ------ ------
Net periodic postretirement benefit cost.......... $ 2,431 $2,608 $2,755
------- ------ ------
------- ------ ------
</TABLE>
The accumulated postretirement benefit obligation and net periodic
postretirement benefit cost were determined using discount rates of 8.5% in 1993
and 7.3% in 1994 and 1995, and health care cost trend rates ranging from 10.75%
to 12.25% in 1993, 1994 and 1995, decreasing to 5.5% in 2005.
The health care cost trend rate assumption has a significant effect on the
accumulated postretirement benefit obligation and net periodic postretirement
benefit cost. For example, in 1995 the effect of a one-percentage-point increase
in the assumed health care cost trend rate would be an increase of $2,875 on the
accumulated
F-16
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
14. BENEFIT PLANS--(CONTINUED)
postretirement benefit obligations and an increase of $251 on the aggregate of
the service and interest cost components of the net periodic benefit cost.
15. TAXES
The sources of the Group's income (loss) before taxes and minority interest
were as follows:
<TABLE>
<CAPTION>
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Switzerland.................................. $ (5) $ 9,855 $11,431
Non-Switzerland.............................. (2,967) 12,652 16,373
------- ------- -------
$(2,972) $22,507 $27,804
------- ------- -------
------- ------- -------
</TABLE>
The provision (benefit) for taxes consists of:
<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
------- -------- ------
<S> <C> <C> <C>
Year ended December 31, 1993:
Switzerland Federal........................ $ 464 $ (308) $ 156
Switzerland Canton (State) and Local....... 130 (509) (379)
Non-Switzerland............................ 5,328 (2,064) 3,264
------- -------- ------
$5,922 $ (2,881) $3,041
------- -------- ------
------- -------- ------
Year ended December 31, 1994:
Switzerland Federal........................ $1,182 $ (32) $1,150
Switzerland Canton (State) and Local....... 1,215 (53) 1,162
Non-Switzerland............................ 5,538 826 6,364
------- -------- ------
$7,935 $ 741 $8,676
------- -------- ------
------- -------- ------
Year ended December 31, 1995:
Switzerland Federal........................ $ 513 $ (92) $ 421
Switzerland Canton (State) and Local....... 481 (505) (24)
Non-Switzerland............................ 8,339 46 8,385
------- -------- ------
$9,333 $ (551) $8,782
------- -------- ------
------- -------- ------
</TABLE>
The provision for tax expense (benefit) for the years ended December 31,
1993, 1994 and 1995 differed from the amounts computed by applying the
Switzerland federal income tax rate of 9.8% to income (loss) before taxes and
minority interest as a result of the following:
<TABLE>
<CAPTION>
1993 1994 1995
------ ------ ------
<S> <C> <C> <C>
Expected tax................................. $ (291) $2,206 $2,725
Switzerland Canton (state) and local income
taxes, net of
federal income tax benefit................. (342) 1,048 (21)
Non-deductible goodwill...................... 248 249 248
Change in valuation allowance................ 4,601 (716) 1,603
Non-Switzerland income taxes in excess of
(less than) 9.8%........................... (1,295) 5,591 4,968
Other, net................................... 120 298 (741)
------ ------ ------
$3,041 $8,676 $8,782
------ ------ ------
------ ------ ------
</TABLE>
F-17
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
15. TAXES--(CONTINUED)
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
1994 and 1995 are presented below:
<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Deferred tax assets:
Inventory.............................................. $ 8,788 $ 9,706
Accrued and other liabilities.......................... 4,826 6,129
Deferred loss on sale of subsidiaries.................. 6,227 6,725
Accrued postretirement benefit costs................... 9,291 9,227
Accrued pension costs.................................. 5,684 6,276
Non-Switzerland foreign net operating loss
carryforwards........................................ 10,523 10,140
Other.................................................. 5,168 4,082
-------- --------
Total gross deferred tax assets........................ 50,507 52,285
Less valuation allowance............................... (19,563) (21,166)
-------- --------
Gross deferred tax assets less valuation allowance..... 30,944 31,119
-------- --------
Deferred tax liabilities:
Inventory.............................................. 5,946 5,952
Property, plant and equipment.......................... 21,352 21,675
Other.................................................. 4,077 4,200
-------- --------
Total gross deferred tax liabilities................... 31,375 31,827
-------- --------
Net deferred tax liability............................. $ (431) $ (708)
-------- --------
-------- --------
</TABLE>
The net change in the total valuation allowance, including changes
resulting from translation of such amounts from the local functional currencies
to the reporting currency, for the years ended December 31, 1993, 1994 and 1995
was an increase of $4,601 and $1,603 in 1993 and 1995, respectively, and a
decrease of $716 in 1994.
The Group has established valuation allowances primarily for net operating
losses and deferred losses on the sale of subsidiaries as follows:
<TABLE>
<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Net operating losses:
Nordic Region........................................ $ 2,511 $ 2,680
Belgium.............................................. 1,537 1,937..
Spain................................................ 2,379 1,551
Australia............................................ 1,189 1,415
Others............................................... 2,907 2,557
------- -------
Total net operating losses............................. 10,523 10,140
Deferred losses on sale of subsidiaries................ 6,227 6,725
Other.................................................. 2,813 4,301
------- -------
Total valuation allowance.............................. $19,563 $21,166
------- -------
------- -------
</TABLE>
At December 31, 1995, the Group had federal net operating loss
carryforwards in various countries other than Switzerland for income tax
purposes of $28,017. Of this amount, $19,363 had no expiration date, relating to
subsidiaries in Sweden, Belgium, Australia, United Kingdom, and Singapore.
Additionally, there were operating
F-18
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
15. TAXES--(CONTINUED)
losses at that date in various other countries in the amount of $8,654 which
expire in varying amounts through 2001.
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income,
and tax planning strategies in making this assessment.
16. OTHER CHARGES (INCOME), NET
In June, 1993, Mettler-Toledo management approved a plan of reorganization
designed to reduce the Group's production capacity in Europe. In connection with
the reorganization, the Group recorded in 1993 charges of $19,774, including
approximately $3,800 for non-cash asset writedowns and approximately $16,000 for
severance and other costs. During 1994 the reorganization was substantially
completed.
Other income in 1993, 1994 and 1995 primarily relates to gains from sales
of property, and in 1994 to a gain on sale of a cost basis investment.
17. FINANCIAL INCOME, NET
Financial income (expense) consists of the following for the years ended
December 31:
<TABLE>
<CAPTION>
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Interest income......................... $ 4,590 $ 4,386 $ 5,388
Foreign currency transactions, net...... (416) 478 3,242
-------- -------- --------
$ 4,174 $ 4,864 $ 8,630
-------- -------- --------
-------- -------- --------
</TABLE>
18. COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
The Group leases certain of its facilities in the U.S. and U.K. under
operating leases. The future minimum future lease payments under non-cancelable
operating leases are as follows at December 31, 1995:
<TABLE>
<S> <C>
1996.......... $ 8,497
1997.......... 5,878
1998.......... 3,731
1999.......... 1,802
2000.......... 1,145
Thereafter.... 6,407
-------
Total......... $27,460
-------
-------
</TABLE>
Rent expense for operating leases amounted to $9,077, $10,508 and $11,480
in 1993, 1994 and 1995, respectively.
F-19
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
18. COMMITMENTS AND CONTINGENCIES--(CONTINUED)
LEGAL
The Group is party to various legal proceedings, including certain
environmental matters, incidental to the normal course of business. Management
does not expect that any of such proceedings will have a material adverse effect
on the Group's financial condition or results of operations.
19. GEOGRAPHIC SEGMENT INFORMATION
The tables below shows the Group's operations by geographic region.
Transfers between geographic regions are priced to reflect consideration of
market conditions and the regulations of the countries in which the transferring
entities are located.
<TABLE>
<CAPTION>
NET SALES BY NET SALES TRANSFERS BETWEEN TOTAL NET SALES INCOME (LOSS)
1993 DESTINATION BY ORIGIN GEOGRAPHIC AREAS BY ORIGIN FROM OPERATIONS
- ------------------ ------------ --------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Switzerland(1).... $ 29,927 $ 83,904 $ 116,281 $ 200,185 $(2,394)
Germany........... 123,464 132,012 34,403 166,415 115
Other Europe...... 193,919 172,527 679 173,206 (2,317)
------------ --------- ----------------- --------------- ---------------
Total Europe...... 347,310 388,443 151,363 539,806 (4,596)
United States..... 258,968 283,615 27,638 311,253 7,319
Other Americas.... 54,713 32,834 62 32,896 1,497
------------ --------- ----------------- --------------- ---------------
Total Americas.... 313,681 316,449 27,700 344,149 8,816
Asia and other.... 67,967 24,066 84 24,150 2,738
Eliminations...... -- -- (179,147) (179,147) 1,135
------------ --------- ----------------- --------------- ---------------
Totals............ $728,958 $ 728,958 $ -- $ 728,958 $ 8,093
------------ --------- ----------------- --------------- ---------------
------------ --------- ----------------- --------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
NET SALES BY NET SALES TRANSFERS BETWEEN TOTAL NET SALES INCOME (LOSS) TOTAL
1994 DESTINATION BY ORIGIN GEOGRAPHIC AREAS BY ORIGIN FROM OPERATIONS ASSETS
- ------------------ ------------ --------- ----------------- --------------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Switzerland(1).... $ 31,992 $ 89,495 $ 133,583 $ 223,078 $10,516 $ 369,868
Germany........... 126,527 133,772 37,056 170,828 10,034 127,071
Other Europe...... 215,230 192,557 776 193,333 1,665 108,692
------------ --------- ----------------- --------------- --------------- ---------
Total Europe...... 373,749 415,824 171,415 587,239 22,215 605,631
United States..... 269,034 300,244 29,877 330,121 10,111 265,440
Other Americas.... 56,628 33,204 64 33,268 939 13,728
------------ --------- ----------------- --------------- --------------- ---------
Total Americas.... 325,662 333,448 29,941 363,389 11,050 279,168
Asia and other.... 69,725 19,864 75 19,939 238 21,601
Eliminations...... -- -- (201,431) (201,431) (2,553) (223,202)
------------ --------- ----------------- --------------- --------------- ---------
Totals............ $769,136 $ 769,136 $ -- $ 769,136 $30,950 $ 683,198
------------ --------- ----------------- --------------- --------------- ---------
------------ --------- ----------------- --------------- --------------- ---------
</TABLE>
F-20
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE COMBINED FINANCIAL STATEMENTS--(CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS UNLESS OTHERWISE STATED)
19. GEOGRAPHIC SEGMENT INFORMATION--(CONTINUED)
<TABLE>
<CAPTION>
NET SALES BY NET SALES TRANSFERS BETWEEN TOTAL NET SALES INCOME (LOSS) TOTAL
1995 DESTINATION BY ORIGIN GEOGRAPHIC AREAS BY ORIGIN FROM OPERATIONS ASSETS
- ------------------ ------------ --------- ----------------- --------------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Switzerland(1).... $ 41,820 $ 102,712 $ 159,453 $ 262,165 $ 6,316 $ 593,955
Germany........... 151,974 158,393 47,379 205,772 14,799 196,460
Other Europe...... 247,802 228,939 799 229,738 2,080 123,431
------------ --------- ----------------- --------------- --------------- ---------
Total Europe...... 441,596 490,044 207,631 697,675 23,195 913,846
United States..... 263,945 298,053 29,578 327,631 7,363 257,956
Other Americas.... 52,966 32,732 131 32,863 950 14,474
------------ --------- ----------------- --------------- --------------- ---------
Total Americas.... 316,911 330,785 29,709 360,494 8,313 272,430
Asia and other.... 91,908 29,586 97 29,683 2,331 31,777
Eliminations...... -- -- (237,437) (237,437) 3,554 (493,959)
------------ --------- ----------------- --------------- --------------- ---------
Totals............ $850,415 $ 850,415 $ -- $ 850,415 $37,393 $ 724,094
------------ --------- ----------------- --------------- --------------- ---------
------------ --------- ----------------- --------------- --------------- ---------
</TABLE>
- ------------------
(1) Includes Corporate.
20. SUBSEQUENT EVENT (UNAUDITED)
Pursuant to the terms of a Stock Purchase Agreement (as amended, the
'Agreement') dated April 2, 1996, between AEA MT Inc., AGP, and Ciba, Ciba
agreed to sell to AEA MT Inc. and AEA MT Inc. agreed to purchase from Ciba all
of the capital stock and other equity instruments in the entities listed in Note
1. Consummation of the transaction contemplated by the Agreement is subject to
various terms and conditions.
F-21
<PAGE>
METTLER-TOLEDO GROUP
INTERIM COMBINED STATEMENTS OF NET ASSETS
DECEMBER 31, 1995 AND JUNE 30, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1995
----------------- JUNE 30, 1996
-------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents............. $ 41,402 $ 45,935
Due from Ciba and affiliates.......... 33,072 53,025
Trade accounts receivable, net........ 159,218 157,212
Inventories........................... 110,986 107,342
Deferred taxes........................ 6,180 5,836
Other current assets.................. 21,469 25,040
----------------- -------------
Total current assets.................. 372,327 394,390
Property, plant and equipment, net...... 241,018 225,885
Goodwill, net........................... 84,425 83,155
Long-term deferred taxes................ 14,312 13,596
Other assets............................ 12,012 14,894
----------------- -------------
Total assets....................... $ 724,094 $ 731,920
----------------- -------------
----------------- -------------
LIABILITIES AND NET ASSETS
Current liabilities
Trade accounts payable................ $ 34,389 $ 34,265
Accrued and other liabilities......... 107,118 101,782
Taxes payable......................... 11,737 16,439
Deferred taxes........................ 7,698 7,313
Bank and other loans.................. 29,513 32,610
Notes payable to Ciba and
affiliates......................... 91,132 83,242
----------------- -------------
Total current liabilities.......... 281,587 275,651
Long-term debt payable to Ciba and
affiliates............................ 145,097 152,231
Long-term debt due to third parties..... 3,621 6,015
Long-term deferred taxes................ 13,502 12,827
Other long-term liabilities............. 84,303 88,979
----------------- -------------
Total liabilities.................. 528,110 535,703
Minority interest....................... 2,730 2,855
Net assets:
Capital employed...................... 162,604 173,964
Currency translation adjustment....... 30,650 19,398
----------------- -------------
Total net assets................... 193,254 193,362
----------------- -------------
Total liabilities and net assets... $ 724,094 $ 731,920
----------------- -------------
----------------- -------------
</TABLE>
See the accompanying notes to the interim combined financial statements
F-22
<PAGE>
METTLER-TOLEDO GROUP
INTERIM COMBINED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30,
----------------------
1995 1996
--------- ---------
(UNAUDITED)
<S> <C> <C>
Net sales.................................... $ 406,992 $ 423,802
Cost of sales................................ 243,643 252,203
--------- ---------
Gross profit............................ 163,349 171,599
Research and development expenses............ 27,005 25,054
Marketing and selling expenses............... 80,965 81,378
General and administrative expenses.......... 37,909 39,153
Amortization of goodwill..................... 1,289 1,270
--------- ---------
Income from operations.................. 16,181 24,744
Interest expense............................. 8,717 8,346
Financial income, net........................ 2,403 965
--------- ---------
Income before taxes and minority
interest............................... 9,867 17,363
Provision for taxes.......................... 3,117 6,830
Minority interest............................ 270 526
--------- ---------
Net income.............................. $ 6,480 $ 10,007
--------- ---------
--------- ---------
</TABLE>
See the accompanying notes to the interim combined financial statements
F-23
<PAGE>
METTLER-TOLEDO GROUP
INTERIM COMBINED STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
CURRENCY
CAPITAL TRANSLATION
EMPLOYED ADJUSTMENT TOTAL
-------- ---------- --------
(UNAUDITED)
<S> <C> <C> <C>
Net assets at January 1, 1995...... $218,129 $ 10,065 $228,194
Capital transactions with Ciba and
affiliates....................... (18,644) -- (18,644)
Net income......................... 6,480 -- 6,480
Change in currency translation
adjustment....................... -- 28,823 28,823
-------- ---------- --------
Net assets at June 30, 1995........ $205,965 $ 38,888 $244,853
-------- ---------- --------
-------- ---------- --------
Net assets at January 1, 1996...... $162,604 $ 30,650 $193,254
Capital transactions with Ciba and
affiliates....................... 1,353 -- 1,353
Net income......................... 10,007 -- 10,007
Change in currency translation
adjustment....................... -- (11,252) (11,252)
-------- ---------- --------
Net assets at June 30, 1996........ $173,964 $ 19,398 $193,362
-------- ---------- --------
-------- ---------- --------
</TABLE>
See the accompanying notes to the interim combined financial statements
F-24
<PAGE>
METTLER TOLEDO GROUP
INTERIM COMBINED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30,
--------------------------
1995 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income........................................ $ 6,480 $ 10,007
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation................................... 13,880 12,942
Amortization of goodwill....................... 1,289 1,270
Amortization and write-down of other
intangibles................................... 314 147
Net (gain) loss on disposal of long-term
assets........................................ 290 (131)
Deferred taxes................................. 367 (191)
Minority interest.............................. 270 526
Increase (decrease) in cash resulting from
changes in:
Trade accounts receivable, net............... (3,822) (4,666)
Inventories.................................. (1,162) 279
Other current assets......................... (7,306) (352)
Trade accounts payable....................... 597 932
Accruals and other liabilities, net.......... 11,869 16,097
----------- -----------
Net cash provided by operating
activities.............................. 23,066 36,860
----------- -----------
Cash flows from investing activities:
Proceeds from sale of property, plant and
equipment...................................... 1,046 508
Purchase of property, plant and equipment......... (6,527) (10,053)
Investments in other long term assets, net........ (721) (37)
----------- -----------
Net cash used in investing activities..... (6,202) (9,582)
----------- -----------
Cash flows from financing activities:
Repayment of third party debt..................... (2,779) (1,078)
Ciba and affiliates borrowings (repayments)....... 5,291 (16,368)
Capital transactions with Ciba and affiliates..... (9,685) (2,983)
----------- -----------
Net cash used in financing activities..... (7,173) (20,429)
----------- -----------
Effect of exchange rate changes on cash and cash
equivalents.................................... 5,569 (2,316)
----------- -----------
Net increase in cash and cash
equivalents............................. 15,260 4,533
Cash and cash equivalents:........................
Beginning of year.............................. 63,802 41,402
----------- -----------
End of six month period........................ $ 79,062 $ 45,935
----------- -----------
----------- -----------
</TABLE>
See the accompanying notes to the interim combined financial statements
F-25
<PAGE>
METTLER-TOLEDO GROUP
NOTES TO THE INTERIM COMBINED FINANCIAL STATEMENTS
(IN THOUSANDS UNLESS OTHERWISE STATED)
1. BASIS OF PRESENTATION
The accompanying interim combined financial statements have been prepared
in accordance with United States generally accepted accounting principles on a
basis which reflects the interim combined financial statements of the companies
constituting the Mettler-Toledo Group ('Mettler-Toledo' or the 'Group') assuming
that the Group, currently a business unit of Ciba-Geigy AG ('Ciba'), was
organized for all periods presented as a separate legal entity. Pursuant to the
terms of the Stock Purchase Agreement dated April 2, 1996 between AEA MT Inc.,
AG fur Prazisionsinstrumente, and Ciba, Ciba agreed to sell to AEA MT Inc. and
AEA MT Inc. agreed to purchase from Ciba all of the capital stock and other
equity instruments in the entities representing the Group.
The accompanying interim combined financial statements as of June 30, 1996
and for the six month periods ended June 30, 1995 and 1996 should be read in
conjunction with the December 31, 1994 and 1995 combined financial statements
and the notes thereto contained elsewhere in this Prospectus.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
The Mettler-Toledo Group is a manufacturer and marketer of weighing
instruments for use in laboratory, industrial and food retailing applications.
The Group also manufacturers and sells certain related laboratory measurement
instruments. The Group's manufacturing facilities are located in Switzerland,
the United States, Germany and China.
INVENTORIES
Inventories are valued at the lower of cost or market. Cost, which includes
direct materials, labor and overhead plus indirect overhead, is determined using
the first in, first out (FIFO) or weighted average cost methods, and to a lesser
extent the last in, first out (LIFO) method.
Inventories consisted of the following at December 31, 1995 and June 30,
1996:
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1995 1996
------------ --------
<S> <C> <C>
Raw materials and parts....... $ 45,523 $ 43,227
Work in progress.............. 38,191 36,810
Finished goods................ 30,149 29,765
------------ --------
113,863 109,802
LIFO reserve.................. (2,877) (2,460)
------------ --------
$110,986 $107,342
------------ --------
------------ --------
</TABLE>
MANAGEMENT REPRESENTATION
The accompanying unaudited interim combined financial statements have been
prepared by Group management pursuant to the rules and regulations of the
Securities and Exchange Commission and reflect all adjustments (consisting of
only normal recurring adjustments) which, in the opinion of management, are
necessary for a fair statement of the results of the interim periods presented.
Operating results for the six month period ended June 30, 1996 are not
necessarily indicative of the results to be expected for the year ending
December 31, 1996.
F-26
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholder
MT Acquisition Corp.
We have audited the accompanying balance sheet of MT Acquisition Corp. as of
July 16, 1996. This balance sheet is the responsibility of the Company's
management. Our responsibility is to express an opinion on this balance sheet
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
of the balance sheet provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of MT Acquisition Corp. as of July 16,
1996, in conformity with generally accepted accounting principles.
KPMG FIDES PEAT
Zurich, Switzerland
July 19, 1996
F-27
<PAGE>
MT ACQUISITION CORP.
BALANCE SHEET
JULY 16, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash................................................................. $1,000
------
Total assets.................................................... $1,000
------
------
STOCKHOLDER'S EQUITY
Common Stock, $1.00 par value; 1,000 shares authorized, issued and
outstanding........................................................ $1,000
------
Total stockholder's equity...................................... $1,000
------
------
</TABLE>
See accompanying notes to balance sheet
F-28
<PAGE>
MT ACQUISITION CORP.
NOTES TO BALANCE SHEET
JULY 16, 1996
1. ORGANIZATION AND ACCOUNTING POLICIES
MT Acquisition Corp. was incorporated under the laws of the State of
Delaware on July 16, 1996 for the purpose of effecting the acquisition of the
Mettler-Toledo Group from Ciba-Geigy AG ('Ciba'). MT Acquisition Corp. is a
wholly-owned subsidiary of Mettler-Toledo Holding Inc. ('Holding') which is a
wholly owned subsidiary of MT Investors Inc. As of July 16, 1996, MT Acquisition
Corp. has not conducted any operations.
2. ACQUISITION
On April 2, 1996, MT Investors Inc. entered into a Stock Purchase Agreement
(as amended, 'Acquisition Agreement') to acquire the business of the
Mettler-Toledo Group from Ciba and its wholly-owned subsidiary, AG fur
Prazisionsinstrumente ('AGP'). The acquisition of the Mettler-Toledo Group will
be accomplished through the purchase of all of the outstanding capital stock of
Mettler-Toledo, Inc. and Mettler-Toledo Holding AG ('Swiss Subholding'), which,
together with their respective subsidiaries, will constitute the entire Mettler-
Toledo Group.
The Acquisition Agreement provides that AGP will sell all the shares and
equity interests owned by AGP which form the combined Mettler-Toledo Group for
consideration consisting of (i) SFr 512.4 million ($421.7 million) in cash and
(ii) the repayment of all intercompany indebtedness owed by the Mettler Toledo
Group to Ciba or AGP as of the Closing Date.
The acquisition will be effected as follows: (i) AEA Investors Inc., its
senior management and its investor-shareholders, together with the management
and certain employees of the Mettler-Toledo Group and Ciba (which will purchase
a 5% interest), will contribute approximately $190.0 million in cash to MT
Investors Inc.; (ii) MT Investors Inc. will contribute such funds to Holding,
which in turn will contribute such funds to MT Acquisition Corp.; (iii) MT
Acquisition Corp. will borrow $135.0 million of term loans under a credit
agreement with various lenders (the 'Credit Agreement') and will issue $115.0
million of senior subordinated notes due 2006 (the 'Notes'); (iv) MT Acquisition
Corp. will purchase the stock of Mettler-Toledo, Inc. and Swiss Subholding from
AGP; (v) Swiss Subholding will borrow $195.8 million under the Credit Agreement;
(vi) Mettler-Toledo, Inc. and Swiss Subholding will repay intercompany
indebtedness to AGP and its affiliates (which aggregated $182.4 million at June
30, 1996); and (vii) MT Acquisition Corp. will be merged into Mettler-Toledo,
Inc. As a result of these transactions, Mettler-Toledo, Inc. will be the issuer
of the Notes and the Swiss Subholding will be a wholly owned subsidiary of
Mettler-Toledo, Inc. Actual amounts at the closing of the acquisition will vary.
F-29
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholder
Mettler-Toledo Holding Inc.
We have audited the accompanying consolidated balance sheet of Mettler-Toledo
Holding Inc. as of July 16, 1996. This balance sheet is the responsibility of
the Company's management. Our responsibility is to express an opinion on this
balance sheet based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
of the balance sheet provides a reasonable basis for our opinion.
In our opinion, the consolidated balance sheet referred to above presents
fairly, in all material respects, the consolidated financial position of
Mettler-Toledo Holding Inc. as of July 16, 1996, in conformity with generally
accepted accounting principles.
KPMG FIDES PEAT
Zurich, Switzerland
July 19, 1996
F-30
<PAGE>
METTLER-TOLEDO HOLDING INC.
CONSOLIDATED BALANCE SHEET
JULY 16, 1996
<TABLE>
<S> <C>
ASSETS
Cash...................................................... $1,000
------
Total assets............................................ $1,000
------
------
STOCKHOLDER'S EQUITY
Common Stock, $1.00 par value;
1,000 shares authorized, issued and outstanding......... $1,000
------
Total stockholder's equity.............................. $1,000
------
------
</TABLE>
See accompanying notes to consolidated balance sheet
F-31
<PAGE>
METTLER-TOLEDO HOLDING INC.
NOTES TO CONSOLIDATED BALANCE SHEET
JULY 16, 1996
1. ORGANIZATION AND ACCOUNTING POLICIES
Mettler-Toledo Holding Inc. ('Holding') was incorporated under the laws of
the State of Delaware on July 16, 1996 for the purpose of effecting the
acquisition of the Mettler-Toledo Group from Ciba-Geigy AG ('Ciba'). Holding is
a wholly-owned subsidiary of MT Investors Inc.
The consolidated balance sheet includes the accounts of Holding and its
wholly owned subsidiary, MT Acquisition Corp. All intercompany balances and
transactions have been eliminated.
As of July 16, 1996, Holding and MT Acquisition Corp. have not conducted
any operations.
2. ACQUISITION
On April 2, 1996, MT Investors Inc. entered into a Stock Purchase Agreement
(as amended, 'Acquisition Agreement') to acquire the business of the
Mettler-Toledo Group from Ciba and its wholly-owned subsidiary, AG fur
Prazisionsinstrumente ('AGP'). The acquisition of the Mettler-Toledo Group will
be accomplished through the purchase of all of the outstanding capital stock of
Mettler-Toledo, Inc. and Mettler-Toledo Holding AG ('Swiss Subholding'), which,
together with their respective subsidiaries, will constitute the entire Mettler-
Toledo Group.
The Acquisition Agreement provides that AGP will sell all the shares and
equity interests owned by AGP which form the combined Mettler-Toledo Group for
consideration consisting of (i) SFr 512.4 million ($421.7 million) in cash and
(ii) the repayment of all intercompany indebtedness owed by the Mettler Toledo
Group to Ciba or AGP as of the Closing Date.
The acquisition will be effected as follows: (i) AEA Investors Inc., its
senior management and its investor-shareholders, together with the management
and certain employees of the Mettler-Toledo Group and Ciba (which will purchase
a 5% interest), will contribute approximately $190.0 million in cash to MT
Investors Inc.; (ii) MT Investors Inc. will contribute such funds to Holding,
which in turn will contribute such funds to MT Acquisition Corp.; (iii) MT
Acquisition Corp. will borrow $135.0 million of term loans under a credit
agreement with various lenders (the 'Credit Agreement') and will issue $115.0
million of senior subordinated notes due 2006 (the 'Notes'); (iv) MT Acquisition
Corp. will purchase the stock of Mettler-Toledo, Inc. and Swiss Subholding from
AGP; (v) Swiss Subholding will borrow $195.8 million under the Credit Agreement;
(vi) Mettler-Toledo, Inc. and Swiss Subholding will repay intercompany
indebtedness to AGP and its affiliates (which aggregated $182.4 million at June
30, 1996); and (vii) MT Acquisition Corp. will be merged into Mettler-Toledo,
Inc. As a result of these transactions, Mettler-Toledo, Inc. will be the issuer
of the Notes and the Swiss Subholding will be a wholly owned subsidiary of
Mettler-Toledo, Inc. Actual amounts at the closing of the acquisition will vary.
3. GUARANTEES
The obligations under the Credit Agreement will be guaranteed by Holding
and such guarantee will be secured by a first priority security interest in all
stock of Mettler-Toledo, Inc. held by Holding. In addition, Holding will
unconditionally guarantee on a senior subordinated basis all obligations related
to the Notes (the 'Note Guarantee'). The Note Guarantee will be an unsecured
obligation of Holding and will be subordinated to all existing and future senior
indebtedness of Holding, including its obligations related to its guarantee with
respect to the Credit Agreement.
F-32
<PAGE>
------------------------------------------------------
------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE NOTES IN
ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF
THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.......................................... 3
Risk Factors................................................ 14
The Acquisition............................................. 20
Use of Proceeds............................................. 21
Capitalization.............................................. 22
Unaudited Pro Forma Financial Information................... 23
Selected Historical Financial Information................... 31
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 33
Industry.................................................... 40
Business.................................................... 42
Management.................................................. 54
Certain Relationships and Related Transactions.............. 57
Principal Stockholders...................................... 57
Description of Credit Agreement............................. 58
Description of Notes........................................ 60
Underwriting................................................ 96
Legal Matters............................................... 97
Independent Auditors........................................ 97
Available Information....................................... 97
Index to Financial Statements............................... F-1
</TABLE>
UNTIL , 1997 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS),
ALL DEALERS EFFECTING TRANSACTIONS IN THE NOTES, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION
TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
$115,000,000
[LOGO]
METTLER-TOLEDO, INC.
GUARANTEED ON A SENIOR
SUBORDINATED BASIS BY
METTLER-TOLEDO HOLDING INC.
% SENIOR SUBORDINATED
NOTES DUE 2006
---------------------------
P R O S P E C T U S
---------------------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
LEHMAN BROTHERS
SCOTIA CAPITAL MARKETS
(USA) INC.
, 1996
------------------------------------------------------
------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The following table shows the expenses, other than underwriting discounts
and commissions, to be incurred in connection with the sale and distribution of
securities being registered by Holding and the Issuer.
<TABLE>
<S> <C>
SEC Registration Fee............... $ 46,552
NASD Filing Fee.................... 14,000
Blue Sky Fees and Expenses......... 25,000
Legal Fees and Expenses............ 750,000
Accounting Fees and Expenses....... 1,400,000
Printing Expenses.................. 250,000
Miscellaneous Expenses............. 14,448
----------
Total......................... $2,500,000
----------
----------
</TABLE>
- ------------------
* Except for the SEC registration fee and the NASD Filing Fee, all of the
foregoing expenses have been estimated.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrants, as Delaware corporations, are empowered by Section 145 of
the General Corporation Law of the State of Delaware (the 'DGCL'), subject to
the procedures and limitations stated therein, to indemnify any person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with any
threatened, pending or completed action, suit or proceeding in which such person
is made or threatened to be made a party by reason of his being or having been a
director, officer, employee or agent of the Registrants or his serving at the
request of the Registrants as a director, officer, employee or agent of another
company or other entity. The statute provides that indemnification pursuant to
its provisions is not exclusive of other rights of indemnification to which a
person may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors, or otherwise. Each of the Registrants' By-Laws provide
for indemnification by the respective Registrant of its directors and officers
to the full extent authorized by the DGCL. Pursuant to Section 145 of the DGCL,
the Registrants will purchase insurance on behalf of their present and former
directors and officers against liabilities asserted against and incurred by them
in such capacity or arising out of their status as such.
Pursuant to specific authority granted by Section 102 of the DGCL, each of
the Registrants' Certificates of Incorporation contains the following provision
regarding limitation of liability of directors:
'To the fullest extent permitted by the Delaware General Corporation
Law as the same exists or may hereafter be amended, a Director of the
Corporation shall not be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a Director.'
The Registrants will enter into agreements to provide indemnification for
their directors in addition to the indemnification provided for in the
Registrants' By-laws. These agreements, among other things, indemnify the
directors, to the fullest extent provided by Delaware law, for certain expenses
(including attorneys' fees), losses, claims, liabilities, judgments, fines and
settlement amounts incurred by such indemnitee in any action or proceeding,
including any action by or in the right of the Registrants, on account of
services as a director or officer of any affiliate of the Registrants, or as a
director or officer of any other company or enterprise that the indemnitee
provides services to at the request of the Registrants.
The Management Consulting Agreement between the Company and AEA Investors
Inc. provides for indemnification of employees of AEA Investors Inc. who serve
as directors of the Registrants.
II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On July 16, 1996, MT Acquisition Corp. sold 1,000 shares of its common
stock to Mettler-Toledo Holding Inc. for $1,000. Also on July 16, 1996,
Mettler-Toledo Holding Inc. sold 1,000 shares of its common stock to MT
Investors Inc. for $1,000. Both transactions were exempt from the registration
requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2)
thereof.
ITEM 16. EXHIBITS
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ ------------------------------------------------------------------------
<C> <S>
1.1 -- Form of Purchase Agreement
2.1 -- Stock Purchase Agreement between AEA-MT Inc., AG fur
Prazisionsinstrumente and
Ciba-Geigy AG, as amended**
3.1 -- Certificate of Incorporation of the Issuer**
3.2 -- By-laws of the Issuer**
3.3 -- Certificate of Incorporation of Holding**
3.4 -- By-laws of Holding**
4.1 -- Form of Indenture
4.2 -- Form of Supplemental Indenture (included in Form of Indenture filed
as Exhibit 4.1)
4.3 -- Specimen Note (included in Form of Indenture filed as Exhibit 4.1)
5.1 -- Opinion of Fried, Frank, Harris, Shriver & Jacobson, counsel to the
Company
10.1 -- Form of Credit Agreement between MT Acquisition Corp. and
Mettler-Toledo Holding AG, as borrowers, and Merrill Lynch Capital
Corporation, as documentation agent and the lenders party thereto
10.2 -- Form of Management Consulting Agreement between the Company and AEA
Investors Inc.
10.3 -- Form of Tax Sharing Agreement between Mettler-Toledo, Inc. and MT
Investors Inc.
12.1 -- Computation of Ratio of Earnings to Fixed Charges**
21.1 -- Subsidiaries of the Company
23.1 -- Independent Auditors' Report on Schedule and Consent of KPMG Fides
Peat
23.2 -- Consent of KPMG Fides Peat
23.3 -- Consent of KPMG Fides Peat
23.4 -- Consent of Fried, Frank, Harris, Shriver & Jacobson (included in
opinion filed as Exhibit 5.1)
24.1 -- Powers of Attorney**
25.1 -- Statement of Eligibility of Trustee**
27.1 -- Financial Data Schedule**
</TABLE>
- ------------------
* To be filed by amendment
** Previously filed
(b) Financial Statement Schedule
Schedule II, Valuation and Qualifying Accounts
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrants pursuant to the foregoing provisions, or otherwise, the
Registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrants of expenses
incurred or paid by a director, officer or controlling person of the Registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(b) The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment to Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in New York, New
York on the 1st day of October, 1996.
METTLER-TOLEDO HOLDING INC.
By: /s/ ROBERT F. SPOERRY
--------------------------------
Robert F. Spoerry
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------- ------------------------------------ --------------
<S> <C> <C>
/s/ ROBERT F. SPOERRY President and Chief Executive October 1, 1996
- -------------------------- Officer and Director
Robert F. Spoerry
* Head, Finance and Control (Principal October 1, 1996
- -------------------------- financial and accounting officer)
Fred Ort
* Director October 1, 1996
- --------------------------
Thomas P. Salice
* Director October 1, 1996
- --------------------------
Alan W. Wilkinson
*By: /s/ ROBERT F. SPOERRY
- --------------------------
Robert F. Spoerry
Attorney-in-fact
</TABLE>
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment to Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in New York, New
York on the 1st day of October, 1996.
MT ACQUISITION CORP.
By: /s/ ROBERT F. SPOERRY
--------------------------------
Robert F. Spoerry
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------- ------------------------------------ --------------
<S> <C> <C>
/s/ ROBERT F. SPOERRY President and Chief Executive October 1, 1996
- -------------------------- Officer and Director
Robert F. Spoerry
* Head, Finance and Control (Principal October 1, 19961,
- -------------------------- financial and accounting officer)
Fred Ort
* Director October 1, 1996
- --------------------------
Thomas P. Salice
* Director October 1, 1996
- --------------------------
Alan W. Wilkinson
*By: /s/ ROBERT F. SPOERRY
- --------------------------
Robert F. Spoerry
Attorney-in-fact
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION OF DOCUMENT PAGE NO.
- ------ ------------------------------------------------------------- ----------
<S> <C> <C>
1.1 -- Form of Purchase Agreement
2.1 -- Stock Purchase Agreement between AEA-MT Inc., AG fur
Prazisionsinstrumente and Ciba-Geigy AG, as amended**
3.1 -- Certificate of Incorporation of the Issuer**
3.2 -- By-laws of the Issuer**
3.3 -- Certificate of Incorporation of Holding**
3.4 -- By-laws of Holding**
4.1 -- Form of Indenture
4.2 -- Form of Supplemental Indenture (included in Form of
Indenture filed as Exhibit 4.1)
4.3 -- Specimen Note (included in Form of Indenture filed as
Exhibit 4.1)
5.1 -- Opinion of Fried, Frank, Harris, Shriver & Jacobson,
counsel to the Company
10.1 -- Form of Credit Agreement among MT Acquisition Corp. and
Mettler-Toledo Holding AG, as borrowers, and Merrill Lynch
Capital Corporation, as documentation agent and the
lenders party thereto
10.2 -- Form of Management Consulting Agreement between the
Company and AEA Investors Inc.
10.3 -- Form of Tax Sharing Agreement between Mettler-Toledo, Inc.
and MT Investors Inc.
12.1 -- Computation of Ratio of Earnings to Fixed Charges**
21.1 -- Subsidiaries of the Company
23.1 -- Independent Auditors' Report on Schedule and Consent of
KPMG Fides Peat
23.2 -- Consent of KPMG Fides Peat
23.3 -- Consent of KPMG Fides Peat
23.4 -- Consent of Fried, Frank, Harris, Shriver & Jacobson
(included in opinion filed as Exhibit 5.1)
24.1 -- Powers of Attorney**
25.1 -- Statement of Eligibility of Trustee**
27.1 -- Financial Data Schedule**
</TABLE>
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* To be filed by amendment
** Previously filed
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MT ACQUISITION CORP.
(a Delaware corporation)
METTLER-TOLEDO HOLDING INC.
(a Delaware corporation)
Senior Subordinated Notes due 2006
PURCHASE AGREEMENT
Dated: October , 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Table of Contents
<TABLE>
<S> <C>
PURCHASE
AGREEMENT..................................................................................................... 1
SECTION 1. Representations and
Warranties.................................................................................................... 4
a. Representations and Warranties by the Company and Holding................................... 4
i. Compliance with Registration Requirements.......................................... 4
ii. Independent Accountants............................................................ 5
iii. Financial Statements............................................................... 5
iv. No Material Adverse Change in Business............................................. 5
v. Good Standing...................................................................... 6
vi. Good Standing of Subsidiaries...................................................... 6
vii. Capitalization..................................................................... 7
viii. Authorization of Agreement......................................................... 7
ix. Authorization of the Indenture..................................................... 7
x. Authorization of the Securities.................................................... 8
xi. Description of the Securities and the Indenture.................................... 8
xii. Absence of Defaults and Conflicts.................................................. 8
xiii. Absence of Labor Dispute........................................................... 9
xiv. Absence of Proceedings............................................................. 9
xv. Accuracy of Exhibits............................................................... 10
xvi. Possession of Intellectual Property................................................ 10
xvii. Absence of Further Requirements.................................................... 10
xviii. Possession of Licenses and Permits................................................. 10
xix. Title to Property.................................................................. 11
xx. Compliance with Cuba Act........................................................... 11
xxi. Investment Company Act............................................................. 11
xxii. Environmental Laws................................................................. 11
xxiii. Registration Rights................................................................ 12
xxiv. Taxes.............................................................................. 12
xxv. Accounting Controls................................................................ 12
xxvi. Insurance.......................................................................... 13
xxvii. Solvency........................................................................... 13
xxviii. Events of Default.................................................................. 13
xxix. Stabilization or Manipulation...................................................... 13
xxx. Certain Relationships.............................................................. 13
xxxi. No Offering Material............................................................... 13
xxxii. Suppliers.......................................................................... 14
xxxiii. Assignment of Rights Under Acquisition Agreement................................... 14
b. Officer's Certificates...................................................................... 14
</TABLE>
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<TABLE>
<S> <C>
SECTION 2. Sale and Delivery to Underwriters; Closing........................................................ 14
a. Securities........................................................................................ 14
b. Payment..................................................................................... 14
c. Denominations; Registration................................................................. 15
SECTION 3. Covenants of the Company and Holding.............................................................. 15
a. Compliance with Securities Regulations and Commission Requests.............................. 15
b. Filing of Amendments........................................................................ 16
c. Delivery of Registration Statements......................................................... 16
d. Delivery of Prospectuses.................................................................... 16
e. Continued Compliance with Securities Laws................................................... 16
f. Blue Sky Qualifications..................................................................... 17
g. Rule 158.................................................................................... 17
h. Use of Proceeds............................................................................. 17
i. Restriction on Sale of Securities........................................................... 17
j. Reporting Requirements...................................................................... 18
SECTION 4. Payment of Expenses............................................................................... 18
a. Expenses.................................................................................... 18
b. Termination of Agreement.................................................................... 18
SECTION 5. Conditions of Underwriters' Obligations........................................................... 18
a. Effectiveness of Registration Statement..................................................... 19
b. Opinion of Counsel for Company.............................................................. 19
c. Opinion of Counsel for Underwriters......................................................... 19
d. Officers' Certificate....................................................................... 20
e. Accountant's Comfort Letter................................................................. 20
f. Bring-down Comfort Letter................................................................... 20
g. Maintenance of Rating....................................................................... 20
h. No Objection................................................................................ 21
i. Indenture................................................................................... 21
j. Credit Agreement............................................................................ 21
k. Acquisition................................................................................. 21
m. MTI Agreement............................................................................... 21
l. Solvency Opinion............................................................................ 21
n. Additional Documents........................................................................ 21
o. Termination of Agreement.................................................................... 22
SECTION 6. Indemnification.................................................................................... 22
a. Indemnification of Underwriters............................................................. 22
b. Indemnification of Company, Directors and Officers.......................................... 23
</TABLE>
ii
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<TABLE>
<S> <C>
c. Actions against Parties; Notification....................................................... 23
d. Settlement without Consent if Failure to Reimburse.......................................... 24
SECTION 7. Contribution...................................................................................... 24
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................................... 26
SECTION 9. Termination of Agreement.......................................................................... 26
a. Termination; General........................................................................ 26
b. Liabilities................................................................................. 26
SECTION 10. Default by One or More of the Underwriters....................................................... 26
SECTION 11. Notices.......................................................................................... 27
SECTION 12. Parties.......................................................................................... 27
SECTION 13. GOVERNING LAW AND TIME........................................................................... 28
SECTION 14. Effect of Headings............................................................................... 28
</TABLE>
iii
<PAGE>
MT ACQUISITION CORP.
(a Delaware corporation)
METTLER-TOLEDO HOLDING INC.
(a Delaware corporation)
$115,000,000
Senior Subordinated Notes due 2006
PURCHASE AGREEMENT
October , 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
CS First Boston Corporation
Lehman Brothers Inc.
Scotia Capital Markets (USA) Inc.
as Representative(s) of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
MT Acquisition Corp., a Delaware corporation (the "Company"), and
Mettler-Toledo Holding Inc., a Delaware corporation ("Holding"), confirm their
respective agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for
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<PAGE>
whom Merrill Lynch, CS First Boston Corporation, Lehman Brothers Inc. and Scotia
Capital Markets (USA) Inc. are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective principal amounts set forth in said Schedule A of $115,000,000
aggregate principal amount of the Company's Senior Subordinated Notes due 2006
(the "Securities"). The Securities are to be issued pursuant to an indenture to
be dated as of October , 1996 (the "Indenture") among the Company, as issuer,
Holding, as guarantor, and United States Trust Company of New York, as trustee
(the "Trustee").
The Company and Holding were organized to effect the Acquisition (as
defined in the Registration Statement (as hereinafter defined)), pursuant to the
terms of the Stock Purchase Agreement, dated as of April 2, 1996, as amended
(the "Acquisition Agreement"), among MT Investors Inc. (formerly named AEA MT
Inc.), Ciba-Geigy AG ("Ciba") and AG fr Prazisioninstrumente, a wholly owned
subsidiary of Ciba ("AGP"). The proceeds of the sale of the Securities will be
used as part of the financing of the Acquisition. In the Acquisition, the
Company will acquire from AGP direct or indirect control of Mettler-Toledo,
Inc., a Delaware corporation ("MTI"), Mettler-Toledo Holding AG, a Swiss
corporation organized in connection with the Acquisition ("Swiss Subholding"),
and each of the entities listed in Note 1 to the audited combined financial
statements included in the Registration Statement (collectively, including MTI,
the "Mettler-Toledo Group"). The entities constituting the Mettler-Toledo Group
are hereinafter referred to collectively as the "Mettler-Toledo Group
Companies," and each such entity is hereinafter referred to individually as a
"Mettler-Toledo Group Company."
Immediately following the consummation of the sale of the Securities
hereunder, the Company will be merged (the "Merger") with and into MTI, which
will become a wholly owned subsidiary of Holding. Upon consummation of the
Merger, MTI will succeed to, and assume by supplemental indenture (the
"Supplemental Indenture") to be dated the date of the Closing Time (as
hereinafter defined) all of the obligations of the Company under the Indenture
and the Securities, and will succeed to all of the obligations of the Company
hereunder.
Prior to or simultaneously with the issuance and sale of the
Securities, the Company and Swiss Subholding will enter into a credit agreement
(the "Credit Agreement") among the Company and Swiss Subholding, as borrowers,
Merrill Lynch Capital Corporation, as agent and arranger, the Bank of Nova
Scotia, as administrative agent, Credit Suisse and Lehman Commercial Paper Inc.,
as co-agents, and the other financial institutions party thereto, among other
things, to provide a portion of the financing of the Acquisition.
The Securities will be guaranteed by Holding on a senior subordinated
basis, pursuant to a guarantee included within the Indenture and the Securities
(the "Holding Guarantee"). The Holding Guarantee will be subordinated to, among
other things, the guarantee by Holding of the indebtedness incurred pursuant to
the Credit Agreement.
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<PAGE>
The Company and Holding understand that the Underwriters propose to
make a public offering of the Securities as soon as the Representatives deem
advisable after this Agreement has been executed and delivered and the Indenture
has been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act").
The Company and Holding have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (No.
333-9621) covering the registration of the Securities and the Holding Guarantee
under the Securities Act of 1933, as amended (the "1933 Act"), including the
related preliminary prospectus or prospectuses. Promptly after execution and
delivery of this Agreement, the Company and Holding will either (i) prepare and
file a prospectus in accordance with the provisions of Rule 430A ("Rule 430A")
of the rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations or (ii) if the Company has elected to rely upon Rule 434 ("Rule
434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto and schedules thereto, if any, at the
time it became effective and including the Rule 430A Information and the Rule
434 Information, as applicable, is herein called the "Registration Statement."
Any registration statement filed pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "Registration Statement" shall include the Rule
462(b) Registration Statement. The final prospectus in the form first furnished
to the Underwriters for use in connection with the offering of the Securities is
herein called the "Prospectus." If Rule 434 is relied on, the term "Prospectus"
shall refer to the preliminary prospectus dated September 16, 1996 together with
the Term Sheet and all references in this Agreement to the date of the
Prospectus shall mean the date of the Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").
3
<PAGE>
SECTION 1. Representations and Warranties.
a. Representations and Warranties by the Company and Holding.
Each of the Company and Holding, jointly and severally, represents and warrants
to each Underwriter as of the date hereof, and as of the Closing Time referred
to in Section 2(b) hereof, and agrees with each Underwriter, as follows:
i. Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company or Holding, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time, the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under the
1939 Act (the "1939 Act Regulations"), and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time, included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Company and Holding will
comply with the requirements of Rule 434 and the Prospectus shall not
be "materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective. The representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement
or Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus, and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically
4
<PAGE>
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
ii. Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
iii. Financial Statements. The financial statements included
in the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly (A) the combined financial
position of the Mettler-Toledo Group at the dates indicated and the
combined statement of operations, changes in net assets and cash flows
of the Mettler-Toledo Group for the periods specified; (B) the
financial position of the Company at the date indicated and (C) the
consolidated financial position of Holding at the date indicated; said
financial statements have been prepared in conformity with U.S.
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of
the audited financial statements included in the Registration
Statement. The pro forma financial statements and the related notes
thereto included in the Registration Statement and the Prospectus
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions and circumstances referred to
therein.
iv. No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Mettler-Toledo Group, considered as one enterprise,
whether or not arising in the ordinary course of business, and no
material adverse effect on the ability of the Company or Holding to
consummate the Acquisition, including the transactions contemplated
hereby, as the case may be (any such material adverse change or effect,
a "Material Adverse Effect"), (B) there have been no transactions
entered into by any Mettler-Toledo Group Company, the Company or
Holding, other than those in the ordinary course of business, which are
material with respect to the Mettler-Toledo Group, the Company or
Holding, respectively, and (C) there has been no dividend or
distribution of any kind declared, paid or made for or to Ciba or AGP
by any Mettler-Toledo Group Company on any class of its capital stock.
5
<PAGE>
v. Good Standing. Each of the Company and Holding has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; and each of the
Company and Holding is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect. MTI has been duly organized and
is validly existing as a corporation in good standing under the laws of
the State of Delaware and has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and, upon consummation of the Merger, to
perform its obligations under this Agreement; and MTI is duly qualified
as a foreign corporation to transact business and is in good standing
in each other U.S. state in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
vi. Good Standing of Subsidiaries. Each of Swiss Subholding
and each Mettler-Toledo Group Company "significant subsidiary" (as
such term is defined in Rule 1-02 of Regulation S-X) of Holding (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each U.S. state in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by Ciba, directly or through subsidiaries, and upon consummation
of the Merger, will be owned by MTI, directly or through subsidiaries,
in each case free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity (each a "Lien") except for any Lien
created pursuant to the Credit Agreement or local working capital
facilities permitted by the Credit Agreement securing the indebtedness
thereunder; and none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The only subsidiaries of MTI
after giving effect to the Acquisition are the subsidiaries listed on
Exhibit 21 to the Registration Statement.
6
<PAGE>
vii. Capitalization. The pro forma capitalization of the
Company at June 30, 1996, as adjusted to give effect to the
Acquisition, is as set forth in the Prospectus in the column entitled
"Pro Forma" under the caption "Capitalization." The shares of issued
and outstanding capital stock of the Company have been duly authorized
and validly issued, are fully paid and non-assessable; and are owned by
Holding free and clear of any Lien except for any Lien created pursuant
to the Credit Agreement or local working capital facilities permitted
by the Credit Agreement securing the indebtedness thereunder; and none
of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any
securityholder thereof. Upon consummation of the Merger, the shares of
issued and outstanding stock of MTI and Swiss Subholding will be duly
authorized and validly issued, will be fully paid and non-assessable
and will be owned by Holding directly or through subsidiaries, free and
clear of any Lien except for any Lien created pursuant to the Credit
Agreement or local working capital facilities permitted by the Credit
Agreement securing the indebtedness thereunder; and none of the
outstanding shares of capital stock of MTI or Swiss Subholding will be
issued in violation of the preemptive or other similar rights of any
securityholder thereof.
viii. Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by each of the Company and
Holding.
ix. Authorization of the Indenture. The Indenture has been
duly authorized by the each of Company and Holding and duly qualified
under the 1939 Act and, when duly executed and delivered by the
Company, Holding and the Trustee, will constitute a valid and binding
agreement of each of the Company and Holding (and, upon consummation of
the Merger and execution and delivery of the Supplemental Indenture, of
MTI), enforceable against each of the Company and Holding (and, upon
consummation of the Merger and execution and delivery of the
Supplemental Indenture, of MTI) in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at
law). The Supplemental Indenture has been duly authorized by each of
MTI and Holding and, when duly executed and delivered by MTI, Holding
and the Trustee, will constitute a valid and binding agreement of each
of MTI and Holding, enforceable against each of MTI and Holding in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
7
<PAGE>
x. Authorization of the Securities. The Securities and the
Holding Guarantee have been duly authorized and, at the Closing Time,
will have been duly executed by the Company and Holding, respectively,
and, when authenticated (in the case of the Securities), issued and
delivered in the manner provided for in the Indenture and delivered
against payment of the purchase price therefor as provided in this
Agreement, will constitute valid and binding obligations of the
Company (and, upon consummation of the Merger and execution and
delivery of the Supplemental Indenture, of MTI) and of Holding,
respectively, enforceable against the Company (and, upon consummation
of the Merger and execution and delivery of the Supplemental
Indenture, against MTI) and against Holding, respectively, in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and will be in the form contemplated
by, and entitled to the benefits of, the Indenture.
xi. Description of the Securities and the Indenture. The
Securities, the Holding Guarantee and the Indenture will conform in
all material respects to the respective statements relating thereto
contained in the Prospectus and will be in substantially the
respective forms filed as exhibits to the Registration Statement.
xii. Absence of Defaults and Conflicts. None of the
Company, Holding, Swiss Subholding or any Mettler-Toledo Group Company
is in violation of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which any of them is a party or by which it or any of
them may be bound, or to which any of their respective properties or
assets is subject (collectively, "Agreements and Instruments") except
for such defaults that would not result in a Material Adverse Effect;
and, except as disclosed in the Registration Statement with respect to
business operations in China, the execution, delivery and performance
of this Agreement, the Indenture, the Supplemental Indenture, the
Securities and the Holding Guarantee and the consummation of the
transactions contemplated herein and in the Registration Statement
(including each of the transactions constituting the Acquisition, the
issuance and sale of the Securities and the Holding Guarantee and the
use of the proceeds from the sale of the Securities as described in
the Prospectus under the caption "Use of Proceeds") and compliance by
each of the Company and Holding (and, upon consummation of the Merger
and execution and delivery of the Supplemental Indenture, by MTI) with
its obligations hereunder and under the Indenture, the Securities and
the Holding Guarantee, as the case may be, have been duly authorized
by all necessary corporate action and do not and will not, whether
with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event
(as defined below) under, or
8
<PAGE>
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, Holding, Swiss
Subholding or any Mettler-Toledo Group Company pursuant to, the
Agreements and Instruments (except for debt agreements which will be
repaid in full at the Closing and such other conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation
of the provisions of the charter or by-laws of the Company, Holding,
Swiss Subholding or any Mettler-Toledo Group Company or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company, Holding, Swiss Subholding or any
Mettler-Toledo Group Company or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Company, Holding,
Swiss Subholding or any Mettler-Toledo Group Company.
xiii. Absence of Labor Dispute. No labor dispute with the
employees of any Mettler-Toledo Group Company exists or, to the
knowledge of the Company or Holding, is imminent, and neither the
Company nor Holding is aware of any existing or imminent labor
disturbance by the employees of any Mettler-Toledo Group Company's
principal suppliers, manufacturers, customers or contractors, which,
in either case, might reasonably be expected to result in a Material
Adverse Effect.
xiv. Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or Holding, threatened, against or
affecting the Company, Holding, Swiss Subholding or any Mettler-Toledo
Group Company which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably
be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated in this Agreement or the
transactions constituting the Acquisition or the performance by the
Company or Holding (or, upon the consummation of the Merger, by MTI)
of its obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company, Holding, Swiss
Subholding or any Mettler-Toledo Group Company is a party or of which
any of their respective property or assets is the subject which are
not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
9
<PAGE>
xv. Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which
have not been so described and filed as required.
xvi. Possession of Intellectual Property. The
Mettler-Toledo Group Companies own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade
names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them,
except where the failure to so own, possess or acquire, singly and in
the aggregate, would not result in a Material Adverse Effect, and no
Mettler-Toledo Group Company has received any notice or is other wise
aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of any Mettler-Toledo Group Company
therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
xvii. Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company or
Holding (or, upon consummation of the Merger and execution and
delivery of the Supplemental Indenture, by MTI) of its obligations
hereunder, in connection with the offering, issuance or sale of the
Securities or the Holding Guarantee hereunder or the consummation of
the transactions contemplated by this Agreement, for the due
execution, delivery or performance of the Indenture by the Company and
Holding (and upon consummation of the Merger and execution and
delivery of the Supplemental Indenture, by MTI), or for the
consummation of the transactions constituting the Acquisition, except
such as have been already made or obtained or as may be required under
the 1933 Act or the 1933 Act Regulations or state securities laws and
except for the qualification of the Indenture under the 1939 Act and
except as disclosed in the Registration Statement.
xviii. Possession of Licenses and Permits. The Company,
Holding, Swiss Subholding and the Mettler-Toledo Group Companies
possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them except
for such Governmental Licenses the failure of which to possess would
not have a Material Adverse Effect; the Company, Holding, Swiss
Subholding and the Mettler-Toledo Group Companies are in compliance
with the terms and conditions of all such Governmental Licenses,
except where the failure
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so to comply would not, singly, or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and none of
the Company, Holding, Swiss Subholding or any Mettler-Toledo Group
Company has received any written notice of any judicial or
administrative proceedings relating to the revocation or modification
of any such Governmental Licenses which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
xix. Title to Property. The Mettler-Toledo Group Companies
have good and marketable title to all real property owned by the
Mettler-Toledo Group Companies and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectus or (b) do not,
singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by any Mettler-Toledo Group Company; or (c)
would not have a Material Adverse Effect; and all of the leases and
subleases material to the business of the Mettler-Toledo Group, and
under which any Mettler-Toledo Group Company holds properties
described in the Prospectus, are in full force and effect, and no
Mettler-Toledo Group Company has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of any
Mettler-Toledo Group Company under any of the leases or subleases
mentioned above, or affecting or questioning the rights of any
Mettler-Toledo Group Company to the continued possession of the leased
or subleased premises under any such lease or sublease.
xx. Compliance with Cuba Act. Each of the Mettler-Toledo
Group Companies has complied with, and is and will be in compliance
with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of
the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
xxi. Investment Company Act. None of the Company, Holding
or MTI is, or upon the consummation of the Acquisition, the issuance
and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus will be,
an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
xxii. Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) no Mettler-Toledo
Group Company is in violation of any federal, state, local or foreign
statute, law, regulation, ordinance, code, common law or any judicial
or administrative interpre-
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tation thereof enforceable at law or in equity, including any
applicable judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata), including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum
products subject to regulation under any environmental law
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Mettler-Toledo Group Companies have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company or
Holding, threatened administrative, regulatory or judicial actions,
suits, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against any Mettler-Toledo Group Company and (D) to the knowledge
of the Company or Holding, there are no events or circumstances that
could reasonably be expected to form the basis of an order for
clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against any
Mettler-Toledo Group Company relating to Hazardous Materials or any
Environmental Laws.
xxiii. Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company, Holding or MTI under the 1933 Act.
xxiv. Taxes. The Mettler-Toledo Group Companies have filed
all tax returns that are required to have been filed by them pursuant
to applicable law except insofar as the failure to file such returns
would not result in a Material Adverse Effect, and have paid all taxes
due pursuant to such returns or pursuant to any assessment received by
any Mettler-Toledo Group Companies, except for such taxes, if any, as
are being contested in good faith by appropriate proceedings and as to
which adequate reserves have been provided in accor dance with GAAP,
and except for the failure to pay such taxes which, individually and
in the aggregate, would not have a Material Adverse Effect. The
charges, accruals and reserves on the books of the Mettler-Toledo
Group in respect of any tax liability for any years not finally
determined are adequate in accordance with GAAP to meet any
assessments or reassessments for additional tax for any years not
finally determined, except to the extent of any inadequacy that would
not result in a Material Adverse Effect.
xxv. Accounting Controls. The Mettler-Toledo Group
Companies maintain a system of internal accounting controls sufficient
to provide reasonable assurances that (A)transactions are executed in
accordance with management's general or specific authorization,
(B)transactions are recorded as necessary to permit preparation of
financial
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statements in conformity with generally accepted accounting principles
and to maintain accountability for assets, (C)access to assets is
permitted only in accordance with management's general or specific
authorization and (D)the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
xxvi. Insurance. The Mettler-Toledo Group Companies carry
or are entitled to the benefits of insurance, with financially sound
and reputable insurers, in such amounts and covering such risks as is
generally maintained by companies of established repute engaged in the
same or similar business, and all such insurance is in full force and
effect.
xxvii. Solvency. Each of the Company, Holding, MTI and
Swiss Subholding is, and immediately after the Closing Time will be,
Solvent. As used herein, the term "Solvent" means, with respect to
such entity on a particular date, that on such date (A) the aggregate
fair market value of the assets of such entity is greater than the
total amount of liabilities (including contingent liabilities) of such
entity, (B) the present fair salable value of the assets of such
entity is greater than the amount that will be required to pay the
probable liabilities of such entity on its debts as they become
absolute and matured, (C) such entity is able to realize upon its
assets and pay its debts and other liabilities, including contingent
obligations, as they mature, and (D) such entity does not have
unreasonably small capital.
xxviii. Events of Default. No event of default exists under
any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument constituting Senior Indebtedness or
Guarantor Senior Indebtedness (in each case, as defined in the
Indenture).
xxix. Stabilization or Manipulation. Neither the Company
nor Holding has taken, directly or indirectly, any action designed to
cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of any such entity to
facilitate the sale or resale of the Securities.
xxx. Certain Relationships. No relationship, direct or
indirect, exists between or among any of the Company, Holding, Swiss
Subholding or any Mettler-Toledo Group Company or any affiliate of any
such entity, on the one hand, and any director, officer, stockholder,
customer or supplier of any of them, on the other hand, which is
required by the 1933 Act or by the 1933 Act Regulations to be
described in the Registration Statement or the Prospectus which is not
so described or is not described as required.
xxxi. No Offering Material. None of the Company, Holding,
Swiss Subholding or any Mettler-Toledo Group Company has distributed
and, prior to the later to occur of (i)the Closing Time and
(ii)completion of the distribution of the Securities, will not
distribute any offering material in connection with the offering and
sale of the Securities other than the
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Registration Statement, any preliminary prospectus, the Prospectus or
other materials, if any, permitted by the 1933 Act and approved by the
Representatives.
xxxii. Suppliers. No supplier of merchandise to any
Mettler-Toledo Group Company has ceased shipments of merchandise
thereto, which cessation would result in a Material Adverse Effect.
xxxiii. Assignment of Rights Under Acquisition Agreement.
All rights of MT Investors Inc. (formerly named AEA MT Inc.) under the
Acquisition Agreement have been assigned to the Company and,
effective upon the Merger, to MTI, pursuant to an agreement a copy of
which has been furnished to counsel for the Underwriters.
b. Officer's Certificates. Any certificate signed by any
officer of the Company, Holding, Swiss Subholding or any Mettler-Toledo Group
Company delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by such entity to each
Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
a. Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price set forth in Schedule B, the aggregate principal
amount of Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional principal amount of Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
b. Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Fried, Frank,
Harris, Shriver & Jacobson, 1 New York Plaza, New York, New York, or at such
other place as shall be agreed upon by the Representatives and the Company, at
9:00 A.M. (Eastern time) or as soon thereafter as practicable prior to 12:00
Noon on October 15, 1996 (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such
date as shall be agreed upon by the Representatives and the Company (such time
and date of payment and delivery being herein called "Closing Time"). For
purposes of Rule 15c6-1 under the Exchange Act, the Closing Time (if later than
the otherwise applicable settlement date) shall be the settlement date for
payment of funds and delivery of Securities sold pursuant to the offering of
Securities contemplated hereby.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery
to the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them.
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It is understood that each Underwriter has authorized the Representatives, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Securities which it has agreed to purchase. Merrill
Lynch, individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the
Securities to be purchased by any Underwriter whose funds have not been
received by the Closing Time, but such payment shall not relieve such
Underwriter from its obligations hereunder.
c. Denominations; Registration. Certificates for the Securities
shall be in such denominations ($1,000 or integral multiples thereof) and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time. The Securities will be made
available for examination and packaging by the Representatives in The City of
New York not later than 10:00 A.M. (Eastern time) on the business day prior to
the Closing Time.
SECTION 3. Covenants of the Company and Holding. Each of the Company
and Holding, jointly and severally, covenants with each Underwriter as follows:
a. Compliance with Securities Regulations and
Commission Requests. The Company and Holding, subject to Section
3(b), will comply with the requirements of Rule 430A or Rule 434, as
applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment
to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii)
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes.
The Company and Holding will promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as it deems necessary
to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission
and, in the event that it was not, it will promptly file such
prospectus. The Company and Holding will make every reasonable effort
to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
b. Filing of Amendments. The Company and Holding will
give the Representatives notice of their intention to file or prepare
any amendment to the Registration Statement (including any filing
under Rule 462(b)), any Term Sheet or any amendment, supplement or
revision to either the prospectus included in the Registration
Statement at the
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time it became effective or to the Prospectus, will furnish the
Representatives with copies of any such documents a reasonable amount
of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or
counsel for the Underwriters shall reasonably object.
c. Delivery of Registration Statements. The Company
and Holding have furnished or will deliver to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates
of experts, and will also deliver to the Representatives, without
charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the
Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to
the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
d. Delivery of Prospectuses. The Company and Holding
have delivered to each Underwriter, without charge, as many copies of
each preliminary prospectus as such Underwriter reasonably requested,
and the Company and Holding hereby consent to the use of such copies
for purposes permitted by the 1933 Act. The Company and Holding will
furnish to each Underwriter, without charge, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
Securities Exchange Act of 1934 (the "1934 Act"), such number of
copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. If applicable, the Prospectus and
any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
e. Continued Compliance with Securities Laws. The
Company and Holding will comply with the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the 1939 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities (but in no event later than
nine months after the date of this Agreement) any event shall occur or
condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend
the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any
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such time to amend the Registration Statement or amend or supplement
the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company and Holding will promptly
prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement
or omission or to make the Regilearn stration Statement or the
Prospectus comply with such requirements, and the Company and Holding
will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
f. Blue Sky Qualifications. The Company and Holding
will use their best efforts, in cooperation with the Underwriters, to
qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions as the
Representatives may reasonably designate and to maintain such
qualifications in effect for a period of not less than one year from
the later of the effective date of the Registration Statement and any
Rule 462(b) Registration Statement; provided, however, that neither
the Company nor Holding shall be obligated to file any general consent
to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
In each jurisdiction in which the Securities have been so qualified,
the Company and Holding will file such statements and reports as may
be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from
the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
g. Rule 158. The Company and Holding will timely file
such reports pursuant to the 1934 Act as are necessary in order to
make generally available to its securityholders as soon as practicable
an earnings statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
h. Use of Proceeds. The Company and Holding will use
the net proceeds received by them from the sale of the Securities in
the manner specified in the Prospectus under "Use of Proceeds".
i. Restriction on Sale of Securities. During a period
of 180 days from the date of the Prospectus, neither the Company nor
Holding will, without the prior written consent of Merrill Lynch,
directly or indirectly, issue, sell, offer or contract to sell, grant
any option for the sale of, or otherwise transfer or dispose of, or
register for sale by others, any debt securities other than the sale
of the Securities and indebtedness under the Credit Agreement and
local working capital facilities permitted by the Credit Agreement.
j. Reporting Requirements. The Company and Holding,
during the period when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, will file all
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documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the
rules and regulations of the Commission thereunder.
SECTION 4. Payment of Expenses. a. Expenses. The Company and
Holding, jointly and severally, will pay all expenses incident to the
performance of their obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of
this Agreement, any Agreement among Underwriters, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, (iv) the
fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectus and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities, (ix) any fees payable in
connection with the rating of the Securities, and (x) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Securities.
b. Termination of Agreement. If this Agreement is terminated by
the Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company and Holding, jointly and severally, shall reimburse
the Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
of the several Underwriters hereunder are subject to the accuracy in all
material respects of the representations and warranties of the Company and
Holding contained in Section 1 hereof or in certificates of any officer of the
Company, Holding, Swiss Subholding or any Mettler-Toledo Group Company
delivered pursuant to the provisions hereof, to the performance by each of the
Company and Holding of its covenants and other obligations hereunder, and to
the following further conditions:
a. Effectiveness of Registration Statement. The
Registration Statement, including any Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission,
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and any request on the part of the Commission for additional
information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing
such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company and
Holding have elected to rely upon Rule 434, a Term Sheet shall have
been filed with the Commission in accordance with Rule 424(b).
b. Opinion of Counsel for Company. At Closing Time,
the Representatives shall have received the favorable opinion, dated
as of Closing Time, of Fried, Frank, Harris, Shriver & Jacobson,
counsel for the Company, in form and substance satisfactory to counsel
for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters to the effect set forth
in Exhibit A hereto and to such further effect as counsel to the
Underwriters may reasonably request. At Closing Time, the
Representatives shall have received the favorable opinions, dated as
of Closing Time, and addressed to them on behalf of the Underwriters,
of any counsel delivered to any lenders under the Credit Agreement in
connection with the execution and delivery of the Credit Agreement or
the consummation of the Acquisition, or otherwise, or letters, dated
as of Closing Time, from such counsel entitling the Underwriters to
rely on such opinions, in each case as counsel for the Underwriters
may reasonably request, together with signed or reproduced copies of
such opinions or letters for each of the other Underwriters.
c. Opinion of Counsel for Underwriters. At Closing
Time, the Representatives shall have received the favorable opinion,
dated as of Closing Time, of Debevoise & Plimpton, counsel for the
Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters with respect to the matters set
forth in clauses (1), (2), (5) through (11), inclusive, and the fourth
paragraph from the end of Exhibit A hereto. In giving such opinion
such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal
law of the United States and the General Corporation Law of the State
of Delaware, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company, Holding,
Swiss Subholding or any Mettler-Toledo Group Company and certificates
of public officials.
d. Officers' Certificate. At Closing Time, there shall
not have been, since the date hereof or since the respective dates as
of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Mettler-Toledo Group,
whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President or
a Vice President of the Company and of the chief financial or chief
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accounting officer of each of the Company and Holding, in each case
dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties
in Section 1(a) hereof are true and correct in all material respects
with the same force and effect as though expressly made at and as of
Closing Time, (iii) each of the Company and Holding, as the case may
be, has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to Closing Time, and
(iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of such officer, no
proceedings for that purpose have been instituted or are pending or
are contemplated by the Commission.
e. Accountant's Comfort Letter. At the time of the
execution of this Agreement, the Representatives shall have received
from KPMG Fides Peat a letter dated such date, in form and substance
satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other Underwriters
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in
the Registration Statement and the Prospectus.
f. Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from KPMG Fides Peat a letter,
dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of
this Section, except that the specified date referred to shall be a
date not more than four business days prior to Closing Time.
g. Maintenance of Rating. At Closing Time, the
Securities shall be rated at least B2 by Moody's Investor's Service
Inc. and B by Standard & Poor's Corporation, and the Company shall
have delivered to the Representatives a letter dated the Closing Time,
from each such rating agency, or other evidence satisfactory to the
Representatives, confirming that the Securities have such ratings; and
since the date of this Agreement, there shall not have occurred a
downgrading in the rating assigned to the Securities or any of the
Company's other debt securities by any nationally recognized
securities rating agency, and no such securities rating agency shall
have publicly announced that it has under surveillance or review its
rating of the Securities or any of the Company's other debt
securities.
h. No Objection. The NASD shall not have raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
i. Indenture. The Indenture shall have been duly
executed and delivered by the Company, Holding and the Trustee, the
Securities and the Holding Guarantee shall have duly executed and
delivered by the Company and Holding, respectively, and the Securities
shall have been duly authenticated by the Trustee.
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j. Credit Agreement. The Company and Swiss Subholding
shall have entered into the Credit Agreement providing for senior bank
financing in an aggregate principal amount of at least $275 million
pursuant to a term loan facility and at least $140 million pursuant to
a revolving credit facility, which Credit Agreement shall be
substantially in the form described in the Prospectus. No event of
default or event which with notice or passage of time or both would
constitute an event of default shall exist under the Credit Agreement;
and the lenders under the Credit Agreement shall have advanced funds
under the Credit Agreement in an amount sufficient to consummate the
Acquisition and provide working capital.
k. Acquisition. Prior to or simultaneously with
Closing Time, all of the conditions precedent to the consummation of
the Acquisition shall have been fulfilled (except to the extent any
such conditions have been waived with the prior consent of the
Representatives); except as disclosed in the Registration Statement
with respect to business operations in China, all necessary consents
to consummate the Acquisition shall have been obtained and shall be in
full force and effect; and each of the transactions constituting the
Acquisition, including, without limitation, the Merger, shall have
been consummated.
l. Solvency Opinion. Prior to or at Closing Time, the
Representatives shall have received a solvency letter of an
independent evaluation firm, in form and substance satisfactory to the
Representatives.
m. MTI Agreement. Simultaneously with Closing Time,
MTI, Holding and the Underwriters shall have executed and delivered an
agreement, in form and substance satisfactory to the Representatives,
whereby MTI will become a party to this Agreement and be subject to
the obligations of this Agreement as if MTI were the Company.
n. Additional Documents. At Closing Time, counsel for
the Underwriters shall have been furnished with such documents and
opinions as they may reasonably request for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
Company, Holding and MTI in connection with the issuance and sale of
the Securities and the Holding Guarantee as herein contemplated shall
be satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
o. Termination of Agreement. If any condition
specified in this Section shall not have been fulfilled when and as
required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company at any time at or prior to
Closing Time, and such termination shall be without liability of any
party to any other party except as provided
21
<PAGE>
in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
a. Indemnification of Underwriters. Each of the Company and
Holding, jointly and severally, agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
i. against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
ii. against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
iii. against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense (a) to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any
22
<PAGE>
amendment or supplement thereto) and (b) with respect to any preliminary
prospectus to the extent that any such loss, liability, claim, damage or
expense of such Underwriter results solely from the fact that such Underwriter
sold Securities to a person as to whom the Company shall establish that there
was not sent by commercially reasonable means, at or prior to the written
confirmation of such sale, a copy of the Prospectus in any case where such
delivery is required by the 1933 Act, if the Company has previously furnished
copies thereof in sufficient quantity to such Underwriter and the loss,
liability, claim, damage or expense of such Underwriter results from an untrue
statement or omission of a material fact contained in the preliminary
prospectus that was corrected in the Prospectus.
b. Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a) of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
c. Actions against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties
be liable for fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
23
<PAGE>
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
d. Settlement without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and Holding on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and Holding
on the one hand and of the Underwriters on the other hand in connection with
the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and Holding on the one
hand and the Underwriters on the other hand in connection with the offering of
the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet, bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
The relative fault of the Company and Holding on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact
24
<PAGE>
relates to information supplied by the Company or Holding or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, Holding and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company and Holding, each officer of the Company and
Holding who signed the Registration Statement, and each person, if any, who
controls the Company and Holding within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company and Holding, respectively. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the principal amount of Securities set forth opposite their respective names
in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company, Holding, Swiss
Subholding or any Mettler-Toledo Group Company submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or controlling person, or by or on
behalf of the Company or Holding, and shall survive delivery of the Securities
to the Underwriters.
25
<PAGE>
SECTION 9. Termination of Agreement.
a. Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company or Holding or the Mettler-Toledo Group Companies
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or Switzerland or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or limited by the Commission, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal, New York or Swiss authorities.
b. Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6 and 7 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail at Closing Time to purchase the Securities
which it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, but not the obligation,
within 24 hours thereafter, to make arrangements for one or more of the non-
defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representatives
shall not have completed such arrangements within such 24-hour period, then (a)
if the number of Defaulted Securities does not exceed 10% of the aggregate
principal amount of the Securities to be purchased hereunder, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or (b) if the number of Defaulted Securities
exceeds 10% of the aggregate principal amount of the Securities to be purchased
hereunder, then this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
26
<PAGE>
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Company shall
have the right to postpone Closing Time for a period not exceeding seven days
in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of Syndicate
Operations, with a copy to Debevoise & Plimpton, 875 Third Avenue, New York,
New York 10022, attention of David A. Brittenham; and notices to the Company or
Holding shall be directed to the Company at Park Avenue Tower, 65 East 55th
Street, 27th Floor, New York, New York 10022, attention of Thomas P. Salice,
and at Im Langacher, P.O. Box MT-100, 8606 Greifensee, Switzerland, attention
of Robert E. Spoerry, with a copy to Timothy E. Peterson at Fried, Frank,
Harris, Shriver & Jacobson, 1 New York Plaza, New York, New York 10004.
SECTION 12. Parties. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Company, Holding and their respective
successors, including, without limitation, MTI as the successor to the Company
in the Merger. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company and Holding and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the Underwriters, the
Company and Holding and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS THEREOF. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 14. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
27
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters, the Company and Holding in accordance with
its terms.
Very truly yours,
MT ACQUISITION CORP.
By
------------------------------
Title:
METTLER-TOLEDO HOLDING INC.
By
------------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CS FIRST BOSTON CORPORATION
LEHMAN BROTHERS INC.
SCOTIA CAPITAL MARKETS (USA) INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
-----------------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named
in Schedule A hereto.
28
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Principal
Amount of
Name of Underwriter Securities
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................................
CS First Boston Corporation...............................................................
Lehman Brothers Inc.......................................................................
Scotia Capital Markets (USA) Inc..........................................................
------------
Total..................................................................................... $115,000,000
============
</TABLE>
Sch A-1
<PAGE>
SCHEDULE B
MT ACQUISITION CORP.
$115,000,000 Senior Subordinated Notes due 2006
1. The initial public offering price of the Securities shall be
___% of the principal amount thereof, plus accrued interest, if any, from the
date of issuance.
2. The purchase price to be paid by the Underwriters for the
Securities shall be ___% of the principal amount thereof.
3. The interest rate on the Securities shall be ___% per annum.
4. The Securities shall be redeemable at the option of the
Company, in whole or in part, at any time on or after ____________, 2001, and
prior to maturity, at the following redemption prices (expressed as percentages
of principal amount), plus accrued interest, if any, to the redemption date, as
further provided in the Indenture, if redeemed during the 12-month period
beginning on _____________ of the years set forth below:
<TABLE>
<CAPTION>
Year Redemption Price
<S> <C>
2001.......................................................................... %
2002.......................................................................... %
2003.......................................................................... %
2004 and thereafter........................................................... 100.0%
</TABLE>
In addition, at any time and from time to time on or prior to
__________, 1999, the Company may redeem in the aggregate up to $40 million of
the original principal amount of the Securities with the proceeds of one or more
Public Equity Offerings (as defined in the Indenture), in each case which yields
gross proceeds to the Company (before discounts, commissions and expenses) of at
least $65 million and following which there is a Public Market (as defined in
the Indenture), at a redemption price (expressed as a percentage of the
principal amount thereof) of _____%, plus accrued interest, if any, to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date),
provided that at least $75 million in aggregate principal amount of the
Securities must remain outstanding after such redemption, as further provided in
the Indenture.
Sch B-1
<PAGE>
Exhibit A
FORM OF OPINION OF FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
October__, 1996
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
CS First Boston Corporation
Lehman Brothers Inc.
Scotia Capital Markets (USA) Inc.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
We are acting as special counsel to each of Mettler-Toledo Holding Inc.
("Holding") and MT Acquisition Corp. (the "Company", together with Holding, the
"Registrants"), each a Delaware corporation, in connection with the underwritten
public offering of $115 million aggregate principal amount of the Company's __%
Senior Subordinated Notes due 2006 (the "Securities"), pursuant to a Purchase
Agreement, dated as of October __, 1996, among the Registrants, Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, CS First Boston
Corporation, Lehman Brothers Inc. and Scotia Capital Markets (USA), Inc. (the
"Purchase Agreement"). This opinion is being delivered pursuant to Section 5(b)
of the Purchase Agreement and simultaneously with the payment by the
Underwriters to the Company for the Securities. Except as provided herein, all
capitalized terms used herein which are defined in the Purchase Agreement have
the respective meanings specified therein.
In connection with this opinion, we have (i) investigated such
questions of law, (ii) examined originals or certified, conformed or
reproduction copies of such agreements, instruments, documents and records of
the Registrants and their respective subsidiaries, such certificates of public
officials and such other documents, and (iii) reviewed such information
A-1
<PAGE>
from officers and representatives of the Registrants and their respective
subsidiaries and others, in each case, as we have deemed necessary or
appropriate for the purposes of this opinion.
In all such examinations, we have assumed the legal capacity of all
natural persons executing documents, the genuineness of all signatures on
original or certified copies, the authenticity of all original or certified
copies and the conformity to original or certified documents of all copies
submitted to us as conformed or reproduction copies. As to various questions of
fact relevant to the opinions expressed herein, we have relied upon, and assume
the accuracy of, the statements made in the certificates of officers of the
Registrants delivered to us, the representations and warranties contained in the
Purchase Agreement and certificates and oral or written statements and other
information of or from public officials and officers and representatives of the
Registrants, their respective subsidiaries and others, and assume compliance on
the part of all parties to the Purchase Agreement with their covenants and
agreements contained therein. With respect to the opinions expressed in
paragraph 3 below, we have relied solely upon a certificate or certificates of
public officials of such jurisdictions, copies of which have been provided to
you.
We have assumed, for purposes of the opinions expressed herein, that
(i) the Trustee has the power and authority to enter into and perform the
Indenture and the Supplemental Indenture, (ii) the Indenture and the
Supplemental Indenture have been duly authorized, executed and delivered by the
Trustee and are valid, binding and enforceable upon the Trustee, and (iii) the
Securities have been duly authenticated by the Trustee. With respect to the
opinion expressed in paragraph 10 below regarding the effectiveness of the
Registration Statement and the absence of any stop orders or proceedings for
that purpose, we are relying upon the oral advice of the staff of the Securities
and Exchange Commission (the "Commission").
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, we are of the opinion that:
1. Each of the Company, Holding and MTI is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. Each of the Company and Holding has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and to enter into and perform its obligations
under the Purchase Agreement. MTI has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and, upon consummation of the Merger, to perform its obligations
under the Purchase Agreement.
A-2
<PAGE>
3. Each of the Company, Holding and MTI is duly qualified as a
foreign corporation to transact business and is in good standing in the states
listed on the schedule to be attached to this opinion.
4. The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued, are fully paid and
non-assessable and, to our knowledge, are owned by Holding free and clear of any
Lien except for any Lien created pursuant to the Credit Agreement and any local
working capital facilities secured under the security documents to the Credit
Agreement (the "Working Capital Facilities"), and none of the outstanding shares
of capital stock of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company. Upon consummation of
the Merger, the shares of issued and outstanding stock of MTI will be duly
authorized and validly issued, will be fully paid and non-assessable and, to
our knowledge, will be owned by Holding, free and clear of any Lien except for
any Lien created pursuant to the Credit Agreement and the Working Capital
Facilities.
5. The Purchase Agreement has been duly authorized, executed and
delivered by each of the Company and Holding.
6. The Indenture has been duly authorized, executed and delivered
by the Company and Holding and constitutes a valid and binding agreement of each
of the Company and Holding (and, upon consummation of the Merger and the
execution and delivery of the Supplemental Indenture, of MTI), enforceable
against each of the Company and Holding (and, upon consummation of the Merger
and the execution and delivery of the Supplemental Indenture, of MTI) in
accordance with its terms. The Supplemental Indenture has been duly authorized
by each of MTI and Holding and (upon the due execution and delivery thereof by
MTI, Holding and the Trustee) constitutes a valid and binding agreement of each
of MTI and Holding, enforceable against each of MTI and Holding in accordance
with its terms.
7. The Securities and the Holding Guarantee are in the forms
contemplated by the Indenture, have been duly authorized by the Company and
Holding, respectively, and the Securities and the Holding Guarantee have been
duly executed and delivered by the Company and Holding, respectively, and
constitute valid and binding obligations of the Company and Holding,
respectively, enforceable against the Company and Holding, respectively, in
accordance with their terms.
8. The Indenture has been duly qualified under the 1939 Act.
9. The Securities, the Holding Guarantee and the Indenture
conform in all material respects to the descriptions thereof contained in the
Prospectus.
A-3
<PAGE>
10. The Registration Statement[, including any Rule 462(b)
Registration Statement,] has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement [or any Rule 462(b) Registration Statement] has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.
11. The Registration Statement[, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable,] the Prospectus [and each amendment or supplement to the
Registration Statement and Prospectus] as of their respective effective or issue
dates (other than the financial statements, notes and schedules thereto and
other financial data included therein or omitted therefrom, and the Trustee's
Statement of Eligibility on Form T-1 (the "Form T-1"), as to which we express no
opinion) complied as to form in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations.
12. The information in the Prospectus under "Description of Credit
Agreement" and "Description of Notes", insofar as such information constitutes a
summary of documents referred to therein, has been reviewed by us and is correct
in all material respects.
13. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any New York, Delaware or
federal court or governmental authority or New York, Delaware or federal agency,
domestic or foreign (other than under the 1933 Act, the 1933 Act Regulations,
the 1934 Act, the 1934 Act Regulations and the 1939 Act, which have been
obtained, or as may be required under the securities or blue sky laws of the
various states, as to which we express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of the Purchase
Agreement or the due execution, delivery or performance of the Indenture or the
Supplemental Indenture by the Company, Holding or MTI, as the case may be, or
for the offering, issuance, sale or delivery of the Securities or the Holding
Guarantee.
14. The execution, delivery and performance of the Purchase
Agreement, the Indenture, the Supplemental Indenture, the Securities and the
Holding Guarantee and the consummation of the transactions contemplated in the
Purchase Agreement, including each of the transactions constituting the
Acquisition, and compliance by each of the Company and Holding (and, upon
consummation of the Merger and execution and delivery of the Supplemental
Indenture, by MTI) with its obligations under the Purchase Agreement, the
Indenture, the Securities and the Holding Guarantee, as the case may be, do not
and will not, whether with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section l (a)(xii) of the Purchase Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company, Holding, Swiss Subholding or any Mettler-Toledo Group
Company pursuant to any agreements filed
A-4
<PAGE>
as Exhibits to the Registration Statement (except for Liens under the Credit
Agreement and the Working Capital Facilities and such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Company, Holding or MTI, or any applicable
New York, Delaware or federal law, statute, rule, regulation, judgment, order,
writ or decree, known to us, of any New York, Delaware or federal government,
government instrumentality or court.
15. None of the Company, Holding or MTI is an "investment company"
as such term is defined in the 1940 Act.
16. Neither the issuance, sale or delivery of the Securities nor
the application of the proceeds thereof by the Company as set forth in the
Prospectus will violate Regulations G, T, U or X of the Board of Governors of
the Federal Reserve System.
In addition, in the course of the preparation by the Registrants of the
Registration Statement and the Prospectus, we participated in conferences with
certain of the officers and representatives of, and the independent public
accountants for the Registrants, at which the Registration Statement and the
Prospectus were discussed. Between the date of effectiveness of the
Registration Statement and the time of delivery of this letter, we attended
additional conferences with certain of the officers and representatives of the
Registrants, at which the contents of the Registration Statement and Prospectus
were discussed to a limited extent. Given the limitations inherent in the
independent verification of factual matters and the character of determinations
involved in the registration process, we are not passing upon or assuming any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except as specified
in paragraph 12. Subject to the foregoing and on the basis of the information
gained in the performance of the services referred to above, including
information obtained from officers and other representatives of, and the
independent public accountants for the Registrants, no facts have come to our
attention that cause us to believe that the Registration Statement, as of its
effective date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus as of its
date contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Also, subject to the foregoing, no facts have come to our
attention in the course of proceedings described in the second sentence of this
paragraph that cause us to believe that the Prospectus, as of the date and time
of delivery of this letter, contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances in which
they were made, not misleading. We express no view or belief, however, with
respect to financial statements, notes or schedules thereto or other financial
data
A-5
<PAGE>
included in or omitted from the Registration Statement or Prospectus or with
respect to the Form T-1 filed as an Exhibit to the Registration Statement.
The opinions set forth above are subject to the following additional
qualifications and assumptions:
(A) Our opinion is subject to (i) applicable bankruptcy,
insolvency, fraudulent transfer, fraudulent conveyance, reorganization,
moratorium and other laws now or hereafter in effect affecting creditors' rights
generally and (ii) general principles of equity (including, without limitation,
standards of materiality, good faith, fair dealing and reasonableness), whether
such principles are considered in a proceeding at law or equity.
(B) Our opinion is subject to the effect of, and we express no
opinion with respect to the application of or compliance with, state securities
or Blue Sky laws.
(C) For purposes of paragraphs 13 and 14 above, we have reviewed
only those statutes, rules and regulations that in our experience are normally
applicable to transactions of the type contemplated by the Indenture, the
Holding Guarantee and the Purchase Agreement.
The opinions expressed herein are limited to the federal laws of the
United States of America, the General Corporation Law of the State of Delaware
and the laws of the State of New York, as currently in effect. We assume no
obligations to supplement this letter if any applicable laws change after the
date hereof or if we become aware of any facts that might change the opinions
expressed herein after the date hereof.
The opinions expressed herein are solely for your benefit and may not
be relied upon in any manner or for any purpose by any other person and may not
be quoted in whole or in part without our prior written consent.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
By:_______________________________________
Timothy E. Peterson
A-6
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
_____________
MT Acquisition Corp., as Issuer
and
Mettler-Toledo Holding Inc., as Note Guarantor,
and
United States Trust Company of New York, as Trustee
------------------------------------
INDENTURE
Dated as of October , 1996
------------------------------------
$115,000,000
% Senior Subordinated Notes due 2006
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of the date hereof
<TABLE>
<CAPTION>
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
- -------------------------------- ---------
<S> <C>
Section 310(a)(1) ................................. 7.11
(a)(2) ................................. 7.11
(a)(3) ................................. N.A.
(a)(4) ................................. N.A.
(a)(5) ................................. 7.11
(b) ................................. 7.09; 7.11;
12.02
(c) ................................. N.A.
Section 311(a) ................................. 7.12
(b) ................................. 7.12
(c) ................................. N.A.
Section 312(a) ................................. 2.05
(b) ................................. 12.03
(c) ................................. 12.03
Section 313(a) ................................. 7.07
(b) ................................. 7.07
(c) ................................. 7.07; 12.02
(d) ................................. 7.07
Section 314(a) ................................. 4.06; 4.20;
12.02
(b) ................................. N.A.
(c)(1) ................................. 12.04
(c)(2) ................................. 12.04
(c)(3) ................................. N.A.
(d) ................................. N.A.
(e) ................................. 12.05
(f) ................................. N.A.
Section 315(a) ................................. 7.01(b),(c)
(b) ................................. 7.05; 12.02
(c) ................................. 7.01(a)
(d) ................................. 7.01(c)
(e) ................................. 6.11
Section 316(a) (last
sentence) ................................. 2.09
(a)(1)(A) ................................. 6.05
(a)(1)(B) ................................. 6.04
(a)(2) ................................. N.A.
(b) ................................. 6.07
Section 317(a)(1) ................................. 6.08
(a)(2) ................................. 6.09
(b) ................................. 2.04
Section 318(a) ................................. 12.01
</TABLE>
- ------------------------------------
Note: This reconciliation and tie shall not, for any pur-
pose, be deemed to be a part of this Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<S> <C>
Section 1.01. Definitions........................................................................... 1
Section 1.02. Incorporation by Reference of Trust Indenture Act..................................... 31
Section 1.03. Rules of Construction................................................................. 32
ARTICLE TWO
THE NOTES
Section 2.01. Forms and Dating...................................................................... 33
Section 2.02. Execution and Authentication.......................................................... 34
Section 2.03. Registrar and Paying Agent............................................................ 34
Section 2.04. Paying Agent to Hold Money in Trust................................................... 35
Section 2.05. Noteholder Lists...................................................................... 35
Section 2.06. Transfer and Exchange................................................................. 36
Section 2.07. Replacement Notes..................................................................... 38
Section 2.08. Outstanding Notes..................................................................... 39
Section 2.09. Treasury Notes........................................................................ 39
Section 2.10. Temporary Notes....................................................................... 39
Section 2.11. Cancellation.......................................................................... 40
Section 2.12. Defaulted Interest.................................................................... 40
Section 2.13. CUSIP Number.......................................................................... 41
Section 2.14. Deposit of Moneys..................................................................... 41
Section 2.15. Computation of Interest............................................................... 41
ARTICLE THREE
REDEMPTION OF NOTES
Section 3.01. Notices to the Trustee................................................................ 41
Section 3.02. Selection of Notes to Be Redeemed..................................................... 41
Section 3.03. Notice of Redemption.................................................................. 42
Section 3.04. Effect of Notice of Redemption........................................................ 43
Section 3.05. Deposit of Redemption Price........................................................... 43
Section 3.06. Notes Redeemed or Purchased in Part................................................... 44
</TABLE>
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<TABLE>
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ARTICLE FOUR
COVENANTS
<S> <C>
Section 4.01. Payment of Notes...................................................................... 44
Section 4.02. Maintenance of Office or Agency....................................................... 45
Section 4.03. Corporate Existence................................................................... 45
Section 4.04. Payment of Taxes and Other Claims..................................................... 46
Section 4.05. Maintenance of Properties............................................................. 46
Section 4.06. Compliance Certificate................................................................ 47
Section 4.07. Waiver of Stay, Extension or Usury Laws............................................... 47
Section 4.08. Limitation on Indebtedness............................................................ 47
Section 4.09. Limitation on Restricted Payments..................................................... 55
Section 4.10. Limitation on Transactions with Affiliates............................................ 61
Section 4.11. Limitation on Certain Liens........................................................... 62
Section 4.12. Limitation on Certain Guarantees...................................................... 63
Section 4.13. Certain Future Note Guarantors........................................................ 64
Section 4.14. Limitation on Other Senior Subordinated Indebtedness.................................. 65
Section 4.15. Limitation on the Sale or Issuance of Preferred Stock of Restricted Subsidiaries...... 65
Section 4.16. Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.......................................................................... 66
Section 4.17. Restriction on Transfer of Assets to Subsidiaries..................................... 67
Section 4.18. Limitation on Disposition of Proceeds of Asset Sales.................................. 68
Section 4.19. Change of Control..................................................................... 71
Section 4.20. Reporting Requirements................................................................ 74
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. Merger, Consolidation and Sale of Assets.............................................. 75
Section 5.02. Successor Substituted................................................................. 77
</TABLE>
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<TABLE>
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ARTICLE SIX
REMEDIES
<S> <C>
Section 6.01. Events of Default..................................................................... 77
Section 6.02. Acceleration.......................................................................... 80
Section 6.03. Other Remedies........................................................................ 82
Section 6.04. Waiver of Past Defaults............................................................... 82
Section 6.05. Control by Majority................................................................... 83
Section 6.06. Limitation on Suits................................................................... 83
Section 6.07. Right of Holders to Receive Payment................................................... 84
Section 6.08. Collection Suit by Trustee............................................................ 84
Section 6.09. Trustee May File Proofs of Claims..................................................... 84
Section 6.10. Priorities............................................................................ 85
Section 6.11. Undertaking for Costs................................................................. 85
Section 6.12. Restoration of Rights and Remedies.................................................... 86
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties................................................................................ 86
Section 7.02. Rights of Trustee..................................................................... 87
Section 7.03. Individual Rights of Trustee.......................................................... 88
Section 7.04. Trustee's Disclaimer.................................................................. 89
Section 7.05. Notice of Default..................................................................... 89
Section 7.06. Money Held in Trust................................................................... 89
Section 7.07. Reports by Trustee to Holders......................................................... 89
Section 7.08. Compensation and Indemnity............................................................ 90
Section 7.09. Replacement of Trustee................................................................ 91
Section 7.10. Successor Trustee by Merger, etc...................................................... 92
Section 7.11. Eligibility; Disqualification......................................................... 92
Section 7.12. Preferential Collection of Claims Against Company..................................... 93
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01. Termination of the Company's Obligations.............................................. 93
Section 8.02. Defeasance and Covenant Defeasance.................................................... 94
Section 8.03. Application of Trust Money............................................................ 99
Section 8.04. Repayment to Company or Note Guarantors............................................... 99
</TABLE>
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<TABLE>
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<S> <C>
Section 8.05. Reinstatement......................................................................... 100
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders............................................................ 100
Section 9.02. With Consent of Holders............................................................... 101
Section 9.03. Compliance with Trust Indenture Act................................................... 103
Section 9.04. Revocation and Effect of Consents..................................................... 103
Section 9.05. Notation on or Exchange of Notes...................................................... 104
Section 9.06. Trustee May Sign Amendments, etc...................................................... 104
ARTICLE TEN
GUARANTEE OF NOTES
Section 10.01.Note Guarantee........................................................................ 105
Section 10.02.Execution and Delivery by Holding of Note Guarantee................................... 107
Section 10.03.Additional Note Guarantors............................................................ 107
Section 10.04.Note Guarantee Obligations Subordinated to Guarantor Senior Indebtedness.............. 108
Section 10.05.Payment Over of Proceeds upon Dissolution, etc........................................ 108
Section 10.06.Suspension of Note Guarantee Obligations When Guarantor Senior
Indebtedness in Default............................................................... 110
Section 10.07.Release of Note Guarantee............................................................. 111
Section 10.08.Waiver of Subrogation................................................................. 112
Section 10.09.Provisions Solely to Define Relative Rights........................................... 112
Section 10.10.Trustee to Effectuate Subordination................................................... 113
Section 10.11.No Waiver of Subordination Provisions................................................. 113
Section 10.12.Notice to Trustee..................................................................... 114
Section 10.13.Reliance on Judicial Order or Certificate of Liquidating Agent
Regarding Dissolution, etc. .......................................................... 115
Section 10.14.Rights of Trustee as a Holder of Guarantor Senior Indebtedness;
Preservation of Trustee's Rights...................................................... 116
Section 10.15.Article Ten Applicable to Paying Agents............................................... 116
</TABLE>
v
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Section 10.16.No Suspension of Remedies............................................................. 116
Section 10.17.Trustee's Relation to Guarantor Senior Indebtedness................................... 117
Section 10.18.Subrogation........................................................................... 117
ARTICLE ELEVEN
SUBORDINATION OF NOTES
Section 11.01.Notes Subordinate to Senior Indebtedness.............................................. 118
Section 11.02.Payment over of Proceeds upon Dissolution, etc........................................ 118
Section 11.03.Suspension of Payment When Senior Indebtedness in Default............................. 120
Section 11.04.Trustee's Relation to Senior Indebtedness.... ........................................ 122
Section 11.05.Subrogation to Rights of Holders of Senior Indebtedness............................... 122
Section 11.06.Provisions Solely to Define Relative Rights........................................... 123
Section 11.07.Trustee to Effectuate Subordination................................................... 124
Section 11.08.No Waiver of Subordination Provisions................................................. 124
Section 11.09.Notice to Trustee..................................................................... 125
Section 11.10.Reliance on Judicial Order or Certificate of Liquidating Agent........................ 126
Section 11.11.Rights of Trustee as a Holder of Senior Indebtedness; Preservation of
Trustee's Rights...................................................................... 126
Section 11.12.Article Applicable to Paying Agents................................................... 127
Section 11.13.No Suspension of Remedies............................................................. 127
ARTICLE TWELVE
MISCELLANEOUS
Section 12.01.Trust Indenture Act of 1939........................................................... 127
Section 12.02.Notices............................................................................... 127
Section 12.03.Communication by Holders with Other Holders........................................... 128
Section 12.04.Certificate and Opinion as to Conditions Precedent.................................... 129
Section 12.05.Statements Required in Certificate or Opinion......................................... 129
</TABLE>
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<CAPTION>
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<S> <C>
Section 12.06.Rules by Trustee, Paying Agent, Registrar............................................. 130
Section 12.07.Legal Holiday......................................................................... 130
Section 12.08.Governing Law......................................................................... 130
Section 12.09.No Recourse Against Others............................................................ 130
Section 12.10.Successors............................................................................ 130
Section 12.11.Multiple Originals.................................................................... 130
Section 12.12.Separability.......................................................................... 130
Section 12.13.Table of Contents, Headings, etc...................................................... 130
Section 12.14.Benefits of Indenture................................................................. 131
SIGNATURES.......................................................................................... 132
</TABLE>
SCHEDULE 1 Existing Liens
EXHIBIT A Form of Note
EXHIBIT B Form of First Supplemental Indenture
vii
<PAGE>
INDENTURE, dated as of October , 1996, between MT
ACQUISITION CORP., a corporation incorporated under the laws
of the State of Delaware (together with its successors, the
"Company"), as issuer, METTLER-TOLEDO HOLDING INC., a
corporation incorporated under the laws of the State of
Delaware, as guarantor, and UNITED STATES TRUST COMPANY OF
NEW YORK, as trustee (the "Trustee").
Each party hereto agrees as follows for the
benefit of each other party and for the equal and ratable
benefit of the Holders of the Company's % Senior
Subordinated Notes due 2006 (the "Notes").
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"Acquired Indebtedness" means (x) Indebtedness of
a Person existing at the time such Person was acquired by
the Company or (y) Indebtedness of a Person assumed by the
Company or a Restricted Subsidiary in connection with its
acquisition of assets from such Person, in each case other
than Indebtedness Incurred in connection with, or in
contemplation of the transaction or series of related
transactions pursuant to which such Person became a
Subsidiary or such assets were so acquired by the Company or
a Restricted Subsidiary.
"Acquisition" means the acquisition pursuant to
the Stock Purchase Agreement, dated as of April 2, 1996,
between MT Investors (formerly named AEA MT Inc.), AG fr
Przisioninstrumente, Greifensee, Switzerland and Ciba-Geigy
AG, as amended to the Issue Date.
"Acquisition Indebtedness" means Indebtedness of a
Restricted Subsidiary (x) Incurred solely for the purpose of
financing the acquisition of the Capital Stock of a Person
that after giving effect to such acquisition will be a
Restricted Subsidiary, or assets constituting substantially
all of a separate division or separate business unit of a
Person, and (y) the proceeds of which (net of fees and
expenses (including fees and expenses of legal counsel and
investment banks) directly related to such Incurrence) are
used to pay the purchase price for such Capital Stock or
assets.
<PAGE>
"AEA" means AEA Investors Inc., a Delaware
corporation, or any legal successor thereto as a result of a
reorganization thereof that does not involve any change in
control thereof.
"Affiliate" of any specified Person means any
other Person, directly or indirectly, controlling or
controlled by or under direct or indirect common control
with such specified Person. For the purposes of this
definition, "control" when used with respect to any Person
means the power to direct the management and policies of
such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. For purposes of Section 4.10
only, "Affiliate" shall also mean any Beneficial Owner of
shares representing 10% or more of the total voting power of
the Voting Stock (on a fully diluted basis) of the Company,
and any Person who would be an Affiliate of any such
Beneficial Owner pursuant to the first sentence hereof.
"Agent" means any Registrar or Paying Agent of the
Notes.
"Asset Sale" means any sale, issuance, conveyance,
transfer, lease or other disposition (including by merger,
consolidation or otherwise) by the Company or any Restricted
Subsidiary, in one or a series of related transactions, of:
(a) any Capital Stock of any Subsidiary of the Company; (b)
all or substantially all of the properties and assets of any
division or line of business of the Company or any
Restricted Subsidiary; or (c) other than in the ordinary
course of business, any properties or assets of the Company
or a Restricted Subsidiary. For the purposes of this
definition, the term "Asset Sale" shall not include any
sale, issuance, conveyance, transfer, lease or other
disposition of properties or assets (i) to the Company or
any Restricted Subsidiary, (ii) that is governed by
Section 5.01, (iii) in one transaction or a series of
related transactions, involving assets with a Fair Market
Value not in excess of $2,500,000 or (iv) involving assets
with a Fair Market Value not in excess of $5,000,000 for all
such dispositions in the aggregate in any fiscal year.
"Attributable Debt" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the
present value (discounted at the interest rate assumed in
making calculations in accordance with FAS 13) of the total
obligations of the lessee for rental payments during the
2
<PAGE>
remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has
been extended).
"Average Life" means, with respect to any
Indebtedness, as at any date of determination, the quotient
obtained by dividing (a) the sum of the products of (i) the
number of years from such date to the date or dates of each
successive scheduled principal payment (including, without
limitation, any sinking fund requirements) of such
Indebtedness multiplied by (ii) the amount of each such
principal payment by (b) the sum of all such principal
payments.
"Bank Agent" means The Bank of Nova Scotia or any
successor or replacement administrative agent under the
Credit Agreement.
"Bankruptcy Law" means Title 11 of the United
States Code or any similar federal, state or foreign law for
the relief of debtors.
"Beneficial Owner" means a "beneficial owner" as
defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to be a "beneficial
owner" of all securities that such Person has the right to
acquire, whether that right is exercisable immediately or
only after the passage of time.
"Board of Directors" means the Board of Directors
of the Company or a designated committee thereof.
"Board Resolution" means a copy of a resolution
certified by the Secretary of the Company or any Note
Guarantor, as the case may be, to have been duly adopted by
the Board of Directors or the board of directors (or desig-
nated committee thereof) of the relevant Note Guarantor and
to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means a day other than a Saturday,
Sunday or any other day on which banking institutions in New
York State are authorized or required by law to close.
"Capital Expenditure Indebtedness" means any
Indebtedness of the Company or any Restricted Subsidiary
(whether consisting of Capitalized Lease Obligations,
Purchase Money Obligations or otherwise) Incurred (x) for
the purpose of financing all or any part of the purchase
3
<PAGE>
price, cost of construction or improvement of any fixed or
capital assets used in a Related Business and (y) no later
than 180 days after the date of such acquisition or the date
of completion of such construction or improvement.
"Capital Stock" of any Person means any and all
shares of, rights to purchase, warrants or options for, or
participations or other interests in (however designated)
equity of such Person, including Preferred Stock, but
excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an
obligation that is required to be classified and accounted
for as a capitalized lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with
GAAP; and the Stated Maturity thereof shall be the date of
the last payment of rent or any other amount due under such
lease.
"Cash Equivalents" means (i) any security,
maturing not more than one year after the date of
acquisition, issued by the United States of America, or an
instrumentality or agency thereof and guaranteed fully as to
principal, premium, if any, and interest by the United
States of America; (ii) any certificate of deposit, time
deposit or bankers' acceptance (or, with respect to non-U.S.
banking institutions, similar instruments), maturing not
more than one year after the day of acquisition, issued by
any commercial banking institution that is a member of the
Federal Reserve System or a commercial banking institution
organized and located in a country recognized by the United
States of America, in each case, having combined capital and
surplus and undivided profits of not less than $500,000,000
(or the foreign currency equivalent thereof), whose
short-term debt has a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according
to Moody's or "A-1" (or higher) according to S&P;
(iii) commercial paper maturing not more than one year after
the date of acquisition issued by a corporation (other than
an Affiliate or Subsidiary of the Company) with a rating, at
the time as of which any investment therein is made, of
"P-1" (or higher) according to Moody's or "A-1" (or higher)
according to S&P; (iv) any money market deposit accounts
issued or offered by a commercial banking institution that
is a member of the Federal Reserve System or a commercial
banking institution organized and located in a country
recognized by the United States of America, in each case,
4
<PAGE>
having combined capital and surplus and undivided profits in
excess of $500,000,000 (or the foreign currency equivalent
thereof); and (v) other short-term investments utilized by
Non-U.S. Restricted Subsidiaries in accordance with normal
investment practices for cash management not exceeding
$5,000,000 in aggregate principal amount outstanding at any
time.
"Change of Control" has the meaning set forth in
Section 4.19(b).
"Commodities Agreements" means one or more of the
following agreements entered into by a Person and one or
more financial institutions: commodity future contracts,
forward contracts, options or other similar agreements or
arrangements designed to protect against fluctuations in the
price of, or the shortage of supply of, commodities from
time to time.
"Company" means MT Acquisition Corp., a Delaware
corporation, and upon consummation of the Merger, means
Mettler-Toledo, Inc., a Delaware corporation, the survivor
of the Merger, until a successor Person shall have become
such pursuant to Article Five, and thereafter "Company"
shall mean such successor Person.
"Consolidated Assets" means the total assets of
the Company and its Restricted Subsidiaries shown on the
Consolidated balance sheet of the Company and its Restricted
Subsidiaries prepared in accordance with GAAP as of the last
day of the immediately preceding fiscal quarter.
"Consolidated Coverage Ratio" as of any date of
determination means the ratio of (i) the aggregate amount of
EBITDA for the period of the most recent four consecutive
fiscal quarters ending prior to the date of such
determination for which consolidated financial statements of
the Company are available to (ii) Consolidated Interest
Expense for such four fiscal quarters, provided, however,
that:
(1) if the Company or any Restricted Subsidiary
(x) has Incurred any Indebtedness since the beginning
of such period that remains outstanding on such date of
determination or if the transaction giving rise to the
need to calculate the Consolidated Coverage Ratio is an
Incurrence of Indebtedness, EBITDA and Consolidated
Interest Expense for such period shall be calculated
after giving effect on a pro forma basis to such
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Indebtedness and the application of the proceeds
thereof as if such Indebtedness had been Incurred on
the first day of such period or (y) has repaid,
repurchased, defeased or otherwise discharged any
Indebtedness since the beginning of the period that is
no longer outstanding on such date of determination, or
if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio involves a discharge of
Indebtedness, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving effect
to such discharge of such Indebtedness, including with
the proceeds of such new Indebtedness, as if such
discharge had occurred on the first day of such period
(except that, in making such computation, the amount of
Indebtedness under any revolving credit facility shall
be computed based upon the average daily balance of
such Indebtedness during such four-quarter period);
(2) if since the beginning of such period the
Company or any Restricted Subsidiary shall have
disposed of any company or any business or any group of
assets constituting an operating unit (a "Disposal"),
(x) EBITDA for such period shall be reduced by an
amount equal to the EBITDA (if positive) directly
attributable to the assets which are the subject of
such Disposal for such period or increased by an amount
equal to the EBITDA (if negative) directly attributable
thereto for such period and (y) Consolidated Interest
Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Company and
its continuing Restricted Subsidiaries in connection
with such Disposal for such period (and, if the Capital
Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted
Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
(3) if since the beginning of such period the
Company or any Restricted Subsidiary (by merger or
otherwise) shall have acquired any company or any
business or any group of assets constituting an
operating unit (for purposes of this definition, an
"Acquisition"), EBITDA and Consolidated Interest
Expense for such period shall be calculated after
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giving pro forma effect thereto (including the
Incurrence of any Indebtedness) as if such Acquisition
had occurred on the first day of such period; and
(4) if since the beginning of such period any
Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Company or
any Restricted Subsidiary since the beginning of such
period) shall have made any Disposal or Acquisition
that would have required an adjustment pursuant to
clause (2) or (3) above if made by the Company or a
Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if
such Disposal or Acquisition occurred on the first day
of such period.
If any Indebtedness bears a floating rate of
interest and is being given pro forma effect, the interest
expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account
any Interest Rate Agreement applicable to such Indebtedness
if such Interest Rate Agreement has a remaining term as at
the date of determination in excess of 12 months). If any
Indebtedness bears, at the option of the Company or a
Restricted Subsidiary, a fixed or floating rate of interest
and is being given pro forma effect, the interest expense on
such Indebtedness shall be computed by applying, at the
option of the Company, either a fixed or floating rate. If
any Indebtedness which is being given pro forma effect was
Incurred under a revolving credit facility, the interest
expense on such Indebtedness shall be computed based upon
the average daily balance of such Indebtedness during the
applicable period. In making any calculation of the
Consolidated Coverage Ratio for any period prior to the date
of the closing of the Acquisition, the Acquisition shall be
deemed to have taken place on the first day of such period.
"Consolidated Income Tax Expense" means for any
period, as applied to any Person, the provision for federal,
state, local and foreign income taxes and capital taxes of
such Person and its Consolidated Subsidiaries for such
period as recorded under "provision for taxes" on the
statement of operations as determined in accordance with
GAAP.
"Consolidated Interest Expense" means, for any
period, the total interest expense of the Company and its
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<PAGE>
Consolidated Subsidiaries, as determined in accordance with
GAAP, plus, to the extent Incurred by the Company and its
Restricted Subsidiaries in such period but not included in
such interest expense, (i) amortization of debt discount
(including amortization of fees), (ii) the interest portion
of any deferred payment obligation which in accordance with
GAAP is required to be reflected on an income statement,
(iii) net costs (including amortization of discounts and
fees) associated with Interest Rate Agreements or Currency
Agreements (other than Currency Agreements permitted by
Section 4.08(b)(viii)(B)), (iv) interest accruing on any
Indebtedness of any other Person that is Guaranteed by the
Company or any Restricted Subsidiary, (v) all commissions,
discounts and other fees and charges with respect to letters
of credit and bankers' acceptance financing, (vi) all
accrued interest, (vii) the aggregate dividends paid or
accrued on Preferred Stock held by Persons other than the
Company or a Wholly Owned Subsidiary, (viii) the interest
component of Capitalized Lease Obligations paid, accrued
and/or scheduled to be paid by the Company and the
Restricted Subsidiaries during such period as determined on
a consolidated basis in accordance with GAAP, and (ix) the
cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person
(other than the Company) in connection with Indebtedness
Incurred by such plan or trust.
"Consolidated Net Income" means, for any period,
the net income (loss) of the Company and its Consolidated
Subsidiaries, as determined in accordance with GAAP;
provided, however, that there shall not be included in such
Consolidated Net Income: (i) any net income of any Person
that is not the Company or a Restricted Subsidiary, except
that, subject to limitations contained in clause (iv) below,
the Company's equity in the net income of any such Person
for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company
or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations
contained in clause (iii) below); (ii) any net income or
loss of any Person acquired by the Company or a Subsidiary
in a pooling of interests transaction for any period prior
to the date of such acquisition; (iii) any net income of any
Restricted Subsidiary if such Subsidiary is subject to
restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Restricted
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Subsidiary, directly or indirectly, to the Company, except
that, subject to the limitations contained in (iv) below,
the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of
cash that could have been distributed by such Restricted
Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend (subject, in the case of
a dividend that could have been made to another Restricted
Subsidiary, to the limitation contained in this clause);
(iv) any gain or loss realized upon any Asset Sale and any
gain or loss realized upon the sale or other disposition of
any Capital Stock of any Person; (v) any extraordinary gain
or loss as recorded on the statement of operations in
accordance with GAAP; (vi) the cumulative effect of a change
in accounting principles as recorded on the statement of
operations in accordance with GAAP; (vii) all deferred
financing costs written off in connection with the early
extinguishment of indebtedness under the Credit Agreement or
the Notes as recorded on the statement of operations in
accordance with GAAP; (viii) any charge relating to the
closure of the Westerville, Ohio facility as recorded on the
statement of operations in accordance with GAAP;
(ix) nonrecurring charges related to the Acquisition and any
other acquisition by the Company or any Restricted
Subsidiary occurring after the Issue Date as recorded on the
statement of operations in accordance with GAAP; (x)
non-cash, nonrecurring charges as recorded on the statement
of operations in accordance with GAAP; (xi) unrealized gains
or losses in respect of Currency Agreements permitted by
Section 4.08(b)(viii)(B) as recorded on the statement of
operations in accordance with GAAP; (xii) unrealized foreign
currency transaction gains or losses in respect of
Indebtedness of any Person denominated in a currency other
than the functional currency of such Person and permitted to
be Incurred under Section 4.08 as recorded on the statement
of operations in accordance with GAAP; and (xiii) any
expense relating to bonuses paid by Ciba-Geigy AG or its
Affiliates (other than an Affiliate that will be an
Affiliate of the Company following consummation of the
Acquisition) to employees of the Company or any Restricted
Subsidiary pursuant to agreements entered into in connection
with the disposition of the Mettler-Toledo Group by Ciba-
Geigy AG, as recorded on the statement of operations in
accordance with GAAP; provided that in the case of any
amount or charge specified in clause (vii), (viii), (ix),
(x), (xi), (xii) or (xiii), such amount or charge shall be
net of any tax or tax benefit to the Company or any of its
Consolidated Subsidiaries resulting therefrom.
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<PAGE>
"Consolidated Non-Cash Charges" of any Person
means, for any period, the aggregate depreciation,
amortization and other non-cash charges of such Person and
its Consolidated Subsidiaries for such period, on a
Consolidated basis, as determined in accordance with GAAP
(excluding any non-cash charge that requires an accrual or
reserve for cash charges for any future period).
"Consolidation" means the consolidation of the
amounts of each of the Restricted Subsidiaries with those of
the Company in accordance with GAAP consistently applied;
provided, however, that "Consolidation" will not include
consolidation of the accounts of any Unrestricted
Subsidiary, but the interest of the Company or any
Restricted Subsidiary in an Unrestricted Subsidiary will be
accounted for as an investment. The term "Consolidated" has
a correlative meaning.
"Corporate Trust Office" means the corporate trust
office of the Trustee at which at any particular time its
corporate trust business shall be principally administered,
which on the date hereof is 114 West 47th Street, New York,
New York 10036, Attention: Corporate Trust Division.
"covenant defeasance" has the meaning set forth in
Section 8.02.
"Credit Agreement" means the Credit Agreement,
dated as of the date hereof, among the Company and Swiss
Subholding, as borrowers, Merrill Lynch Capital Corporation,
as agent and arranger, The Bank of Nova Scotia, as
administrative agent, Credit Suisse and Lehman Commercial
Paper Inc., as co-agents, and the other financial
institutions which are to become parties from time to time
thereto, as such agreement may be amended, modified,
supplemented, renewed, refunded, replaced, increased or
refinanced (in whole or in part) from time to time by one or
more instruments or agreements with the same or other, or
any combination of the same and other, lenders and, in each
case, including, without limitation, any related notes,
letters of credit and applications therefor, guarantees,
collateral documents, instruments and agreements executed in
connection therewith, in each case as amended, modified,
supplemented, renewed, refunded, replaced, increased or
refinanced (in whole or in part) from time to time by one or
more instruments or agreements. Without limiting the
generality of the foregoing, the term "Credit Agreement"
shall, subject to the covenants of this Indenture, include
any agreement (i) changing the maturity of any Indebtedness
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<PAGE>
incurred thereunder or contemplated thereby, (ii) adding
Subsidiaries of the Company as additional borrowers or
guarantors thereunder, (iii) increasing the amount of
Indebtedness incurred thereunder or available to be borrowed
thereunder or (iv) otherwise altering the terms and
conditions thereof.
"Credit Agreement Obligations" means all monetary
obligations of every nature of the Company or a Restricted
Subsidiary, including, without limitation, obligations to
pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities, from time
to time owed to the lenders or any agent under or in respect
of the Credit Agreement.
"Currency Agreement" means in respect of any
Person any foreign exchange contract, currency swap
agreement or other similar agreement as to which such Person
is a party or a beneficiary.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any
Bankruptcy Law.
"Default" means any event that is, or after notice
or passage of time, or both, would be, an Event of Default.
"defeasance" has the meaning set forth in Section
8.02.
"Depository" shall mean The Depository Trust
Company, New York, New York, its nominees and their
respective successors thereto registered under the Exchange
Act or other applicable statute or regulation.
"Designated Senior Indebtedness" means (i) all
Senior Indebtedness and Guarantor Senior Indebtedness under
the Credit Agreement Obligations and (ii) if no Senior
Indebtedness or Guarantor Senior Indebtedness is outstanding
under the Credit Agreement Obligations or if the lenders
under the Credit Agreement shall have consented thereto, any
other Senior Indebtedness (or for certain purposes more
fully described in this Indenture, Guarantor Senior
Indebtedness) which (a) at the time of incurrence exceeds
$25,000,000 in aggregate principal amount and (b) is
specifically designated by the Company (or, in the case of
Guarantor Senior Indebtedness, by the relevant Note
Guarantor) in the instrument evidencing such Senior
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<PAGE>
Indebtedness or Guarantor Senior Indebtedness as "Designated
Senior Indebtedness."
"Disinterested Director" means a member of the
Board of Directors who does not have any material direct or
indirect financial interest in or with respect to any
transaction or series of transactions.
"Dollar" or "$" means the lawful money of the
United States of America.
"EBITDA" for any period means the sum of
Consolidated Net Income, Consolidated Interest Expense,
Consolidated Income Tax Expense and Consolidated Non-Cash
Charges deducted in computing Consolidated Net Income,
without duplication, in each case for such period, of such
Person and its Consolidated Subsidiaries on a Consolidated
basis, all determined in accordance with GAAP.
"Event of Default" has the meaning set forth under
Section 6.01.
"Excess Proceeds" has the meaning set forth in
Section 4.18(a).
"Excess Proceeds Offer" has the meaning set forth
in Section 4.18(b).
"Excess Proceeds Offer Price" has the meaning set
forth in Section 4.18(b).
"Excess Proceeds Purchase Date" has the meaning
set forth in Section 4.18(c).
"Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"Fair Market Value" means, with respect to any
asset or property, the price that could be negotiated in an
arm's-length free market transaction, for cash, between an
informed and willing seller and an informed and willing
buyer, neither of whom is under undue pressure or compulsion
to complete the transaction.
"First Supplemental Indenture" means the First
Supplemental Indenture, to be entered into substantially in
the form attached hereto as Exhibit B.
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"GAAP" means generally accepted accounting
principles in the United States of America as in effect as
of the Issue Date, including those set forth in the opinions
and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board. All ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity
with GAAP.
"Global Note" has the meaning set forth in Section
2.01(a).
"Guarantee" means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing
any Indebtedness or other obligation of any other Person and
any obligation, direct or indirect, contingent or otherwise,
of such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or
other obligation of such Person (whether arising by virtue
of partnership arrangements, or by agreement to keep well,
to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions
or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in
part), provided, however, that the term "Guarantee" shall
not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Guarantor Senior Indebtedness" means, with
respect to any Note Guarantor, the principal of, premium, if
any, and interest (including interest accruing subsequent to
the filing of a petition of bankruptcy at the rate provided
for in the documentation with respect thereto, whether or
not such interest is an allowed claim under applicable
state, federal or foreign law) on and other amounts due on
or in connection with (including any fees, premiums,
expenses, including costs of collection, and indemnities)
any Indebtedness of such Note Guarantor, whether outstanding
on the Issue Date or thereafter created, incurred or
assumed, unless, in the case of any particular Indebtedness,
the instrument creating or evidencing the same or pursuant
to which the same is outstanding expressly provides that
such Indebtedness shall not be senior in right of payment to
the Note Guarantee of such Note Guarantor. Without limiting
the generality of the foregoing, "Guarantor Senior
Indebtedness" shall also include the principal of, premium,
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<PAGE>
if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the
rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under
applicable state, federal or foreign law) on, and all other
amounts owing in respect of, (i) all Credit Agreement
Obligations of such Note Guarantor and (ii) all Related
Currency and Interest Rate Protection Obligations, if any,
of such Note Guarantor, in each case whether outstanding on
the Issue Date or thereafter created, incurred or assumed
and including in respect of claims under guarantees, claims
for indemnity, claims in relation to Related Currency and
Interest Rate Protection Obligations, expense reimbursement
and fees. Notwithstanding the foregoing, "Guarantor Senior
Indebtedness" shall not include (a) Indebtedness evidenced
by the Note Guarantee of such Note Guarantor, (b)
Indebtedness that is pari passu with or expressly
subordinated or junior in right to payment to any Guarantor
Senior Indebtedness of such Note Guarantor, (c) Indebtedness
which, when incurred and without respect to any election
under Section 1111(b) of Title 11, United States Code, is by
its terms without recourse to such Note Guarantor, (d) any
repurchase, redemption or other obligation in respect of
Redeemable Capital Stock of such Note Guarantor, (e) to the
extent it might constitute Indebtedness, amounts owing for
goods, materials or services purchased in the ordinary
course of business or consisting of trade payables or other
current liabilities (other than any current liabilities
owing under the Credit Agreement Obligations or the current
portion of any long-term Indebtedness which would constitute
Guarantor Senior Indebtedness but for the operation of this
clause (e)), (f) to the extent it might constitute
Indebtedness, amounts owed by such Note Guarantor for
compensation to employees or for services rendered to such
Note Guarantor, (g) to the extent it might constitute
Indebtedness, any liability for federal, state, local,
foreign or other taxes owed or owing by such Note Guarantor,
(h) Indebtedness of such Note Guarantor to a Subsidiary of
the Company and (i) that portion of any Indebtedness of such
Note Guarantor which at the time of Incurrence is Incurred
in violation of this Indenture; provided, however, that such
Indebtedness shall be deemed not to have been Incurred in
violation of this Indenture for purposes of this clause (i)
if (x) the holder(s) of such Indebtedness or their
representative or such Note Guarantor shall have furnished
to the Trustee an opinion of recognized independent legal
counsel, unqualified in all material respects, addressed to
the Trustee (which legal counsel may, as to matters of fact,
rely upon an Officers' Certificate of such Note Guarantor)
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<PAGE>
to the effect that the Incurrence of such Indebtedness does
not violate the provisions of this Indenture or (y) such
Indebtedness consists of Credit Agreement Obligations, and
the holder(s) of such Indebtedness or their agent or
representative (1) had no actual knowledge at the time of
Incurrence that the Incurrence of such Indebtedness violated
this Indenture and (2) shall have received a certificate
from an Officer of such Note Guarantor to the effect that
the Incurrence of such Indebtedness does not violate the
provisions of this Indenture.
"Holder" or "Noteholder" means the Person in whose
name a Note is registered on the Registrar's books.
"Holding" means Mettler-Toledo Holding Inc., a
Delaware corporation, and any successor thereto.
"Incur" means issue, assume, Guarantee, incur or
otherwise become liable for, provided, however, that any
Indebtedness or Capital Stock of a Person existing at the
time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to
be Incurred by such Person at the time it becomes a
Subsidiary.
"Indebtedness" means, with respect to any Person,
without duplication, (a) all liabilities of such Person for
borrowed money or for the deferred purchase price of
property or services, excluding any trade accounts payable
and other accrued current liabilities incurred in the
ordinary course of business, but including, without
limitation, all obligations, contingent or otherwise, of
such Person in connection with any letters of credit,
banker's acceptance or other similar credit transaction, or
in connection with any agreement to purchase, redeem,
exchange, convert or otherwise acquire for value any Capital
Stock of such Person, or any warrants, rights or options to
acquire such Capital Stock, now or hereafter outstanding,
(b) all obligations of such Person evidenced by bonds,
notes, debentures or other similar instruments, (c) all
indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with
respect to property acquired by such Person (even if the
rights and remedies of the seller or lender under such
agreement in the event of default are limited to
repossession or sale of such property), but excluding trade
accounts payable arising in the ordinary course of business,
(d) all Capitalized Lease Obligations and all Attributable
Debt of such Person, (e) all Indebtedness referred to in the
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<PAGE>
preceding clauses of other Persons and all dividends of
other Persons, the payment of which is secured by (or for
which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon
property (including, without limitation, accounts and
contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of
such Indebtedness (the amount of such obligation being
deemed to be the lesser of the value of such property or
asset or the amount of the obligation so secured), (f) all
Guarantees of such Person in respect of Indebtedness of
another Person of any of the types referred to in this
definition, (g) all Redeemable Capital Stock of such Person
valued at the greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued dividends,
(h) all Currency Agreements, Interest Rate Agreements and
Commodities Agreements of such Person and (i) any amendment,
supplement, modification, deferral, renewal, extension or
refunding of any liability of such Person of any of the
types referred to in clauses (a) through (h) above.
Notwithstanding the foregoing, Indebtedness shall not
include any Guarantee by the Company of the obligations of
Ciba-Geigy AG or its Affiliates under its Guarantee to the
Pension Benefit Guaranty Corporation with respect to any
unfunded liabilities of any employee benefit plan of the
Company.
For purposes hereof, (x) the "maximum fixed
repurchase price" of any Redeemable Capital Stock that does
not have a fixed repurchase price shall be calculated in
accordance with the terms of such Redeemable Capital Stock
as if such Redeemable Capital Stock were purchased on any
date on which Indebtedness shall be required to be
determined pursuant to this Indenture, and if such price is
based upon, or measured by, the fair market value of such
Redeemable Capital Stock, such fair market value shall be
determined in good faith by the board of directors of the
issuer of such Redeemable Capital Stock and (y) Indebtedness
is deemed to be incurred pursuant to a revolving credit
facility each time an advance is made thereunder. When any
Person becomes a Restricted Subsidiary there shall be deemed
to have been an Incurrence by such Restricted Subsidiary of
all Indebtedness for which it is liable at the time it
becomes a Restricted Subsidiary. If the Company or any
Restricted Subsidiary, directly or indirectly, Guarantees
Indebtedness of another Person, there shall be deemed to be
an Incurrence of such Guaranteed Indebtedness as if the
Company or such Restricted Subsidiary had directly incurred
or otherwise assumed such Guaranteed Indebtedness.
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<PAGE>
"Indenture" means this Indenture, as amended,
modified or supplemented from time to time.
"Interest Payment Date" means the Stated Maturity
of an installment of interest on the Notes, as set forth
therein.
"Interest Rate Agreement" means with respect to
any Person any interest rate protection agreement, interest
rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement as to
which such Person is party or a beneficiary.
"Investment" in any Person means any direct or
indirect advance, loan (other than advances to customers in
the ordinary course of business that are recorded as
accounts receivable on the balance sheet of such Person) or
other extension of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of
any transfer of cash or other property to others or any
payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such
Person. For purposes of the definition of "Unrestricted
Subsidiary" and Section 4.09, (i) "Investment" shall include
the portion (proportionate to the Company's equity interest
in such Subsidiary) of the Fair Market Value of the net
assets of any Subsidiary of the Company at the time that
such Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be
deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Company's "Investment" in such Subsidiary at the
time of such redesignation less (y) the portion
(proportionate to the Company's direct or indirect equity
interest in such Subsidiary) of the Fair Market Value of the
net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from
an Unrestricted Subsidiary shall be valued at its Fair
Market Value at the time of such transfer, in each case, as
determined in good faith by the Board of Directors.
"Issue Date" means the date on which the Notes are
originally issued.
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"Lien" means any mortgage, pledge, security
interest, hypothecation, assignment, conveyance, preference,
priority, encumbrance, lien (statutory or other) or charge
of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Management Services Agreement" means the
Management Services Agreement, dated the date hereof,
between AEA and the Company, as in effect on the Issue Date
and as the same may be amended from time to time in any
manner not adverse to the Holders or in accordance with the
procedures set forth in Section 4.10(a).
"Maturity Date" means, with respect to any Note,
the date on which any principal of such Note becomes due and
payable as therein or herein provided, whether at the Stated
Maturity with respect to such principal or by declaration of
acceleration, call for redemption or purchase (including
pursuant to an Excess Proceeds Offer or an offer in the
event of a Change of Control) or otherwise.
"Merger" means the merger of MT Acquisition Corp.
with and into Mettler-Toledo, Inc. immediately upon
consummation of the Acquisition.
"Moody's" means Moody's Investors Service, Inc. or
any successor rating agency.
"MT Investors" means MT Investors Inc., a Delaware
corporation, and any successor thereto.
"Net Cash Proceeds" means, (a) with respect to any
Asset Sale, the proceeds thereof in the form of cash or Cash
Equivalents, including payments in respect of deferred
payment obligations when received in the form of, or stock
or other assets when disposed for, cash or Cash Equivalents
(except to the extent that such obligations are financed or
sold, but only to the extent they continue to be, with
recourse to the Company or any Restricted Subsidiary), net
of (i) brokerage commissions and other reasonable fees and
expenses (including fees and expenses of legal counsel and
investment banks) actually incurred and related to such
Asset Sale, (ii) provisions for all taxes payable as a
result of such Asset Sale, (iii) amounts required to be paid
to any Person (other than the Company or any Restricted
Subsidiary) owning a beneficial interest in the assets
subject to the Asset Sale and (iv) appropriate amounts to be
provided by the Company or any Restricted Subsidiary, as the
case may be, as a reserve required in accordance with GAAP
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<PAGE>
against any liabilities associated with such Asset Sale and
retained by the Company or any Restricted Subsidiary, as the
case may be, after such Asset Sale, and (b) with respect to
any issuance or sale of Capital Stock, means the proceeds of
such issuance or sale in the form of cash or Cash
Equivalents, including payments in respect of deferred
payment obligations when received in the form of, or stock
or other assets when disposed for, cash or Cash Equivalents
(except to the extent that such obligations are financed or
sold, but only to the extent they continue to be, with
recourse to the Company or any Restricted Subsidiary), net
of (i) brokerage commissions and other reasonable fees and
expenses (including fees of legal counsel and investment
banks) actually incurred and related to such issuance or
sale and (ii) provisions for all taxes payable as a result
of such issuance or sale; in each case, as reflected in an
Officers' Certificate delivered to the Trustee.
"Non-Dollar Indebtedness" means Indebtedness
denominated in any currency other than Dollars.
"Non-payment Default" means, for purposes of
Article Eleven hereof, any default (other than a Payment
Default) with respect to any Designated Senior Indebtedness
pursuant to which the maturity thereof may be accelerated.
"Non-U.S. Restricted Subsidiary" means any
Restricted Subsidiary of the Company other than a U.S.
Restricted Subsidiary.
"Note Amount" has the meaning set forth in Section
4.18(b).
"Note Guarantee" means the Guarantee of the Notes
by Holding on the terms of Article Ten hereof, and any
Guarantee of the Notes on the terms of Article Ten hereof
that may from time to time be executed and delivered
pursuant to the terms of this Indenture. Each such Note
Guarantee shall be in the form prescribed in this Indenture.
"Note Guarantor" means any Person that has issued
a Note Guarantee.
"Notes" means the Notes that are issued under this
Indenture, as amended or supplemented from time to time
pursuant to this Indenture.
"Offer Period" has the meaning set forth in
Section 4.18(c).
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"Officer" means the Chairman of the Board, Chief
Executive Officer, Chief Financial Officer, the President,
any Vice President, the Treasurer or the Secretary of the
Company or Holding, as the case may be.
"Officers' Certificate" means a certificate signed
by two Officers.
"Opinion of Counsel" means a written opinion in
form and substance reasonably satisfactory to the Trustee
from legal counsel who is reasonably acceptable to the
Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.
"Pari Passu Indebtedness" means any Indebtedness
of the Company or any Note Guarantor ranking pari passu with
the Notes or the applicable Note Guarantee, respectively.
"Participants" has the meaning set forth in
Section 2.06.
"Paying Agent" has the meaning set forth in Sec-
tion 2.03, except that, for the purposes of Sections 4.18
and 4.19 and Articles Three and Eight, the Paying Agent
shall not be the Company or a Subsidiary of the Company or
any of their respective Affiliates.
"Payment Blockage Period" shall have the meaning
set forth in Section 11.03.
"Payment Default" means any default in the payment
when due (whether at Stated Maturity, by acceleration or
otherwise) of principal of or interest on, or of
unreimbursed amounts under drawn letters of credit or fees
relating to letters of credit constituting, any Senior
Indebtedness or Guarantor Senior Indebtedness, as applicable
of the Company or any Note Guarantor.
"Permitted Guarantee" means (i) any Guarantee of
Acquired Indebtedness given by any Restricted Subsidiary
prior to (and not in contemplation of) the Incurrence of
such Acquired Indebtedness by the Company or a Restricted
Subsidiary, which Guarantee and Acquired Indebtedness are
Incurred pursuant to clause (vi) of paragraph (b) (or, in
the case of Acquired Indebtedness of the Company,
Section 4.08(a)) or (ii) any Guarantee by the Company of the
obligations of Ciba-Geigy AG or its Affiliates under its
Guarantee to the Pension Benefit Guaranty Corporation with
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respect to any unfunded liabilities of any employee benefit
plan of the Company.
"Permitted Holder" means AEA and its current,
former and future employees, stockholders, directors and
officers and the Company's officers, and (i) trusts for the
benefit of such Persons or the spouses, issue, parents or
other relatives of such Persons, (ii) entities controlling
or controlled by such Persons and (iii) in the event of the
death of any such individual Person, heirs or testamentary
legatees of such Person.
"Permitted Investment" means any of the following:
(i) Investments in Cash Equivalents, (ii) Investments in the
Company or in any Restricted Subsidiary (including any
Person that thereby becomes a Restricted Subsidiary),
(iii) Investments in existence on the Issue Date,
(iv) receivables owing to the Company or any Restricted
Subsidiary, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with
customary trade terms, (v) Interest Rate Agreements designed
to protect the Company or any Restricted Subsidiary against
fluctuations in interest rates in respect of Indebtedness of
the Company or any Restricted Subsidiary, and Currency
Agreements designed to protect the Company or any Restricted
Subsidiary against fluctuations in foreign currency exchange
rates in respect of foreign exchange exposures incurred by
the Company or any Restricted Subsidiary in the ordinary
course of business, in each case, permitted by Section 4.08,
(vi) Investments in the Notes, (vii) Investments in a joint
venture or similar entity that is not a Restricted
Subsidiary and is primarily engaged in a Related Business,
not to exceed $20,000,000 at any time, (viii) Investments in
securities of any Person received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or
insolvency of such Person, (ix) Investments received by the
Company or its Restricted Subsidiaries as consideration for
Asset Sales effected in compliance with Section 4.18,
(x) Investments in an amount not exceeding $5,000,000 in the
aggregate outstanding at any time, and (xi) any Investment
in Ciba-Geigy AG or any Affiliate thereof resulting from the
advancement of amounts not exceeding SFr 38 million equal to
withholding taxes payable in connection with dividends paid
to Ciba-Geigy AG or any Affiliate thereof in connection with
the Acquisition, pending receipt of refund of such
withholding taxes.
"Permitted Junior Securities" means, (i) for
purposes of Article Eleven (so long as the effect of any
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exclusion employing this definition is not to cause the
Notes to be treated in any case or proceeding or similar
event described in clauses (a), (b) or (c) of Section 11.02
as part of the same class of claims as the Senior Indebt
edness or any class of claims pari passu with, or senior to,
the Senior Indebtedness for purposes of any payment or
distribution) debt or equity securities of the Company or
any successor corporation provided for by a plan of reor-
ganization or readjustment that are subordinated at least to
the same extent that the Notes are subordinated to the
payment of all Senior Indebtedness; provided that (a) if a
new corporation results from such reorganization or read
justment, such corporation assumes any Senior Indebtedness
not paid in full in cash or Cash Equivalents in connection
with such reorganization or readjustment and (b) the rights
of the holders of such Senior Indebtedness are not, without
the consent of such holders, altered or impaired by such
reorganization or readjustment, and (ii) for purposes of
Article Ten, any Guarantee by a Note Guarantor of a
Permitted Junior Security of the Company described in clause
(i) above; provided that such Guarantee is subordinated to
the payment of all Guarantor Senior Indebtedness at least to
the same extent that the Note Guarantees are subordinated to
the payment of all Guarantor Senior Indebtedness, and such
Guarantee is subject to provisions substantially similar to
those set forth in Article Ten.
"Permitted Lien" means (i) any Lien as existing on
the Issue Date and listed on Schedule 1 to this Indenture;
(ii) any Lien on any property or assets of a Restricted
Subsidiary granted in favor of the Company or any Restricted
Subsidiary; (iii) any Lien securing the Notes or any Note
Guarantee; (iv) any Lien securing Acquired Indebtedness
Incurred pursuant to Section 4.08(b)(vi), which Lien (x) is
created prior to (and not in connection with or in
contemplation of) the Incurrence of such Acquired
Indebtedness by the Company or any Restricted Subsidiary,
and (y) does not extend to any property or assets of the
Company or any Restricted Subsidiary other than the assets
acquired in connection with the Incurrence of such Acquired
Indebtedness; (v) any Lien securing any Indebtedness
Incurred pursuant to Section 4.08(b)(xi), provided, however,
that such Lien may not extend to any other property owned by
the Company or any Restricted Subsidiary at the time such
Lien is Incurred; (vi) any Lien in favor of the Trustee
under this Indenture; and (vii) any extension, renewal or
replacement in whole or in part, of any Lien described in
the foregoing clauses (i) through (vi), provided that any
such extension, renewal or replacement shall be no more
22
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restrictive in any material respect than the Lien so
extended, renewed or replaced and shall not extend to any
additional property or assets.
"Person" means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization, government or any agency or political
subdivision thereof, or any other entity.
"Predecessor Note" means, with respect to any
particular Note, every previous Note evidencing all or a
portion of the same debt as that evidenced by such par-
ticular Note; and, for the purposes of this definition, any
Note authenticated and delivered under Section 2.07 hereof
in exchange for a mutilated Note or in lieu of a lost,
destroyed or stolen Note shall be deemed to evidence the
same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Stock", as applied to the Capital Stock
of any Person, means Capital Stock of any class or classes
(however designated) that is preferred as to the payment of
dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of
such Person.
"Public Equity Offering" means an underwritten
public offering of newly issued shares of common stock of MT
Investors, Holding or the Company pursuant to an effective
registration statement under the Securities Act, on a
primary basis (whether alone or in conjunction with any
secondary public offering).
"Public Market" means an established public
trading market existing after a Public Equity Offering has
been consummated.
"Purchase Money Obligation" means any Indebtedness
secured by a Lien on real or personal property related to
the business of the Company or any Restricted Subsidiary
that is purchased by the Company or any Restricted
Subsidiary after the Issue Date; provided that (i) any
security agreement or conditional sales or other title
retention contract pursuant to which the Lien on such
property is created shall be entered into within 180 days
after the purchase of such property and shall at all times
be confined solely to such property, (ii) at no time shall
the aggregate principal amount of the Indebtedness secured
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<PAGE>
by such property be increased and (iii)(A) the Indebtedness
secured thereby shall not exceed the purchase price of such
property or (B) the Indebtedness secured thereby shall be
with recourse solely to such property.
"Redeemable Capital Stock" means any class or
series of Capital Stock that, either by its terms, by the
terms of any security into which it is convertible or
exchangeable or by contract or otherwise, is, or upon the
happening of an event or passage of time would be, required
to be redeemed, or matures, on or prior to the 91st day
after any Stated Maturity of the Notes, or is redeemable at
the option of the holder thereof at any time on or prior to
the 91st day after any Stated Maturity of the Notes, or, at
the option of the holder thereof, is convertible into or
exchangeable for Indebtedness or Redeemable Capital Stock at
any time on or prior to the 91st day after any Stated
Maturity of the Notes.
"Redemption Date" means, with respect to any Note
to be redeemed, the date fixed by the Company for such
redemption pursuant to this Indenture and the Notes.
"Redemption Price" means, with respect to any Note
to be redeemed, the price fixed for such redemption pursuant
to the terms of this Indenture and the Notes.
"Refinancing Costs" means, with respect to any
refinancing of term loan borrowings under the Credit
Agreement, an amount equal to (x) the lesser of (I) the
stated amount of any premium or other payment required to be
paid in connection with such refinancing pursuant to the
Credit Agreement and (II) the amount of premium or other
payment actually paid by the Company, Swiss Subholding or
any Restricted Subsidiary at such time to refinance such
borrowings, plus (y) the amount of expenses of the Company,
Swiss Subholding or any Restricted Subsidiary incurred in
connection with such refinancing.
"Registrar" shall have the meaning set forth in
Section 2.03.
"Related Business" means the businesses of the
Company and the Restricted Subsidiaries as conducted on the
Issue Date, and any businesses related, ancillary or
complementary to such businesses.
"Related Currency and Interest Rate Protection
Obligations" means all monetary obligations of every nature
24
<PAGE>
of the Company or a Note Guarantor under or in respect of
any Currency Agreement or Interest Rate Agreement of the
Company or such Note Guarantor either (a) to the extent such
monetary obligations relate to Credit Agreement Obligations
or (b) to the extent such monetary obligations are secured
by collateral securing Credit Agreement Obligations.
"Restricted Payment" shall have the meaning set
forth in Section 4.09.
"Restricted Subsidiary" means any Subsidiary of
the Company other than an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement
relating to property now owned or hereafter acquired by the
Company or a Restricted Subsidiary, whereby the Company or a
Restricted Subsidiary transfers such property to a Person
and the Company or a Restricted Subsidiary leases it from
such Person.
"S&P" means Standard & Poor's Rating Group (a
division of McGraw Hill Inc.) or any successor rating
agency.
"SEC" means the Securities and Exchange
Commission.
"Secured Indebtedness" means any Indebtedness of
the Company or any Subsidiary of the Company secured by a
Lien.
"Securities Act" means the Securities Act of 1933,
as amended.
"Senior Indebtedness" means the principal of,
premium, if any, and interest (including any interest
accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation
with respect thereto, whether or not such interest is an
allowed claim under applicable state, federal or foreign
law) on and other amounts due on or in connection with
(including any fees, premiums, expenses, including costs of
collection, and indemnities) any Indebtedness of the
Company, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any
particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Notes. Without
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<PAGE>
limiting the generality of the foregoing, "Senior
Indebtedness" shall also include the principal of, premium,
if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the
rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under
applicable state, federal or foreign law) on, and all other
amounts owing in respect of, (i) all Credit Agreement
Obligations of the Company and (ii) all Related Currency and
Interest Rate Protection Obligations of the Company, in each
case whether outstanding on the Issue Date or thereafter
created, incurred or assumed and including in respect of
claims under guarantees, claims for indemnity, claims in
relation to Related Currency and Interest Rate Protection
Obligations, expense reimbursement and fees. Notwithstand-
ing the foregoing, "Senior Indebtedness" shall not include
(a) Indebtedness evidenced by the Notes, (b) Indebtedness
that is pari passu with or expressly subordinated or junior
in right of payment to any Senior Indebtedness of the
Company, (c) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) of Title 11,
United States Code, is by its terms without recourse to the
Company, (d) any repurchase, redemption or other obligation
in respect of Redeemable Capital Stock of the Company,
(e) to the extent it might constitute Indebtedness, amounts
owing for goods, materials or services purchased in the
ordinary course of business or consisting of trade payables
or other current liabilities (other than any current
liabilities owing under the Credit Agreement Obligations or
the current portion of any long-term Indebtedness which
would constitute Senior Indebtedness but for the operation
of this clause (e)), (f) to the extent it might constitute
Indebtedness, amounts owed by the Company for compensation
to employees or for services rendered to the Company, (g) to
the extent it might constitute Indebtedness, any liability
for federal, state, local, foreign or other taxes owed or
owing by the Company, (h) Indebtedness of the Company to a
Subsidiary of the Company and (i) that portion of any
Indebtedness of the Company which at the time of Incurrence
is Incurred in violation of this Indenture; provided,
however, that such Indebtedness shall be deemed not to have
been Incurred in violation of this Indenture for purposes of
this clause (i) if (x) the holder(s) of such Indebtedness or
their representative or the Company shall have furnished to
the Trustee an opinion of recognized independent legal
counsel, unqualified in all material respects, addressed to
the Trustee (which legal counsel may, as to matters of fact,
rely upon an Officers' Certificate of the Company) to the
effect that the Incurrence of such Indebtedness does not
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<PAGE>
violate the provisions of this Indenture or (y) such
Indebtedness consists of Credit Agreement Obligations, and
the holder(s) of such Indebtedness or their agent or
representative (1) had no actual knowledge at the time of
Incurrence that the Incurrence of such Indebtedness violated
this Indenture and (2) shall have received a certificate
from an Officer of the Company to the effect that the
Incurrence of such Indebtedness does not violate the
provisions of this Indenture.
"Senior Representative" means the Bank Agent or
any other representatives designated in writing to the
Trustee of the holders of any class or issue of Designated
Senior Indebtedness; provided that, in the absence of a
representative of the type described above, any holder or
holders of a majority of the principal amount outstanding of
any class or issue of Designated Senior Indebtedness may
collectively act as Senior Representative for such class or
issue.
"Senior Subordinated Indebtedness" means the Notes
and any other Indebtedness of the Company that specifically
provides that such Indebtedness is to rank pari passu with
the Notes and is not subordinated by its terms to any
Indebtedness or other obligation of the Company that is not
Senior Indebtedness.
"Senior Subordinated Note Obligations" means
(i) any principal of, premium, if any, and interest on, and
any other amounts owing in respect of, the Notes payable
pursuant to the terms of the Notes or this Indenture or upon
acceleration of the Notes, including, without limitation,
amounts received upon the exercise of rights of rescission
or other rights of action (including claims for damages) or
otherwise, to the extent relating to the purchase price of
the Notes or amounts corresponding to such principal of,
premium, if any, interest, or other amounts owing with
respect to, the Notes and (ii) in the case of any Note
Guarantor, any obligations with respect to the foregoing or
otherwise under its Note Guarantee.
"SFr" means Swiss francs, the lawful money of
Switzerland.
"Significant Note Guarantor" means (x) Holding or
(y) any other Note Guarantor that would be a "significant
subsidiary" of the Company as defined in Rule 1-02 of
Regulation S-X under the Securities Act and the Exchange
Act, as such Rule is in effect on the Issue Date, provided
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<PAGE>
that for purposes of this definition, all references in such
Rule 1-02 to "10 percent" shall be deemed to be "5 percent".
"Significant Restricted Subsidiary" means any
Restricted Subsidiary of the Company that would be a
"significant subsidiary" of the Company as defined in Rule
1-02 of Regulation S-X under the Securities Act and the
Exchange Act, as such Rule is in effect on the Issue Date.
"Specified Indebtedness" means (i) any
Indebtedness of the Company or any Note Guarantor that is
Pari Passu Indebtedness or Subordinated Indebtedness or
(ii) any Indebtedness of any Restricted Subsidiary that is
Subordinated Indebtedness, provided, however, that Specified
Indebtedness shall never include any Credit Agreement
Obligation otherwise constituting Guarantor Senior
Indebtedness or Senior Indebtedness.
"Specified Senior Indebtedness" means any Senior
Indebtedness, Guarantor Senior Indebtedness, or Indebtedness
of any Restricted Subsidiary (other than a Note Guarantor)
that is not Subordinated Indebtedness.
"Specified U.S. Subsidiary Indebtedness" means
Indebtedness of any U.S. Restricted Subsidiary (a) owing to
and held by the Company or any U.S. Restricted Subsidiary
Incurred pursuant to Section 4.08(b)(iv), (b) Incurred
pursuant to clause (vi), (viii), (ix), (x), (xiv), (xv)(1),
(xv)(2), (xvi)(A) or (xvi)(B) of Section 4.08(b) or (c)
Incurred pursuant to Section 4.08(b)(xviii) to refinance
Indebtedness previously Incurred pursuant to Section
4.08(b)(vi).
"Stated Maturity" means, when used with respect to
any security, the date specified in such security as the
fixed date on which the payment of principal of such
security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision
providing for the purchase of such security at the option of
the holder thereof upon the happening of any contingency
beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Indebtedness" means (i) any
Indebtedness of the Company or any Note Guarantor (whether
outstanding on the Issue Date or thereafter Incurred) that
is subordinated or junior in right of payment to the Notes
or any Note Guarantee or (ii) Indebtedness of any Restricted
Subsidiary (other than a Note Guarantor) that is
28
<PAGE>
subordinated or junior in right of payment to any other
Indebtedness of such Restricted Subsidiary.
"Subsidiary" of any Person means any corporation,
association, partnership, limited liability company or other
business entity of which more than 50% of the total voting
power of shares of Capital Stock (including partnership or
other equity interests) generally entitled (without the
incurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned
or controlled, directly or indirectly, by (i) such Person or
(ii) one or more Subsidiaries of such Person.
"Surviving Entity" has the meaning set forth in
Section 5.01.
"Swiss Subholding" means Mettler-Toledo Holding
AG, a Swiss corporation.
"Tax Sharing Agreement" means the Tax Sharing
Agreement, dated the date hereof, between the Company and MT
Investors, as in effect on the Issue Date and as the same
may be amended from time to time in any manner not adverse
to the Holders.
"TIA" means the Trust Indenture Act of 1939 as in
effect on the date of this Indenture, provided, however,
that in the event the Trust Indenture Act of 1939 is amended
after such date, "TIA" means to the extent required by such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Officer" means the Chairman of the Board,
the President or any other officer or assistant officer of
the Trustee assigned by the Trustee to administer its
corporate trust matters.
"Trustee" means the party named as such in this
Indenture until a successor replaces it and, thereafter,
means the successor.
"Unrestricted Subsidiary" means (i) any Subsidiary
of the Company that at the time of determination shall be an
Unrestricted Subsidiary (as designated by the Board of
Directors as provided below) and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may
designate (a "Designation") any Subsidiary of the Company
(other than a Subsidiary that is a Note Guarantor or owns
any Capital Stock of, or owns, or holds any Lien on, any
property of the Company or any other Subsidiary of the
29
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Company that is not a Subsidiary of the Subsidiary to be so
designated) to be an Unrestricted Subsidiary if: (a) no
Default shall have occurred and be continuing at the time of
or after giving effect to such Designation; (b) the Company
could make an Investment at the time of such Designation
(assuming the effectiveness thereof) in an amount (the
"Designation Amount") equal to the Fair Market Value of the
Capital Stock of such Subsidiary on such date; and (c) the
Company could incur $1.00 of additional Indebtedness under
Section 4.08(a) at the time of such Designation (assuming
the effectiveness thereof). In the event of any such
Designation, the Company shall be deemed to have made an
Investment constituting a Restricted Payment pursuant to
Section 4.09 for all purposes of this Indenture in the
Designation Amount. The Board of Directors may revoke (a
"Revocation") any Designation of a Subsidiary as an
Unrestricted Subsidiary if: (a) no Default shall have
occurred and be continuing at the time of and after giving
effect to such Revocation; (b) the Company could Incur $1.00
of additional Indebtedness under Section 4.08(a) at the time
of such Revocation (assuming the effectiveness thereof); and
(c) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Revocation
would, if Incurred at such time, have been permitted to be
Incurred under this Indenture. Any Designation or
Revocation must be evidenced by a Board Resolution
certifying compliance with the foregoing provisions.
The Company shall not, and shall not permit any
Restricted Subsidiary to, at any time (i) provide a
Guarantee of any Indebtedness of any Unrestricted
Subsidiary, (ii) be directly or indirectly liable for any
Indebtedness of any Unrestricted Subsidiary or (iii) be
directly or indirectly liable for any Indebtedness which
provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment
thereof to be accelerated or payable prior to its final
scheduled maturity upon the occurrence of a default with
respect to any Indebtedness of any Unrestricted Subsidiary
(including any right to take enforcement action against such
Unrestricted Subsidiary), except in the case of clause (i)
or (ii) to the extent permitted under Section 4.09. No
Unrestricted Subsidiary shall at any time Guarantee any
obligation of the Company or any Restricted Subsidiary.
"U.S. Government Obligations" means direct
obligations (or certificates representing an ownership
interest in such obligations) of the United States of
America (including any agency or instrumentality thereof)
30
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for the payment of which the full faith and credit of the
United States of America is pledged and which are not
callable or redeemable at the issuer's option.
"U.S. Restricted Subsidiary" means any Restricted
Subsidiary of the Company (a) organized under the laws of
the United States of America, any state thereof or the
District of Columbia or (b) a majority of the assets
(excluding equity investments in other Persons) of which are
located in the United States of America based on the Fair
Market Value of such assets (as determined in good faith by
the Board of Directors).
"U.S. Significant Subsidiary" means any U.S.
Restricted Subsidiary (other than any Note Guarantor) that
individually is, or taken together with other U.S.
Restricted Subsidiaries (other than any Note Guarantor)
would be, a Significant Restricted Subsidiary.
"Voting Stock" means any class or classes of
Capital Stock pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect
at least a majority of the board of directors, managers, or
trustees of any Person (irrespective of whether or not, at
the time, stock of any other class or classes shall have, or
might have, voting power by reason of the happening of any
contingency).
"Wholly Owned Non-U.S. Subsidiary" means a
Non-U.S. Restricted Subsidiary of the Company all the
Capital Stock of which (other than nominal directors'
qualifying shares) is owned by the Company or another Wholly
Owned Non-U.S. Subsidiary.
"Wholly Owned Subsidiary" means a Restricted
Subsidiary of the Company all the Capital Stock of which
(other than nominal directors' qualifying shares) is owned
by the Company or another Wholly Owned Subsidiary.
Section 1.02. Incorporation by Reference of Trust
Indenture Act. Whenever this Indenture refers to a pro
vision of the TIA, the provision is incorporated by ref
erence in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following mean-
ings:
"Commission" means the SEC;
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"indenture notes" means the Notes and the Note
Guarantees;
"indenture noteholder" means a Noteholder or
Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee"
means the Trustee; and
"obligor" on the indenture notes means the
Company, Holding or any other obligor on the Notes.
All other TIA terms used in this Indenture that
are defined by the TIA, defined by TIA reference to another
statute or defined by SEC rule and not otherwise defined
herein have the meanings assigned to them therein.
Section 1.03. Rules of Construction. For all
purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) words in the singular include the plural, and
words in the plural include the singular;
(c) "or" is not exclusive;
(d) provisions apply to successive events and
transactions;
(e) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance
with generally accepted accounting principles, as in
effect from time to time unless reference to GAAP is
made with respect to any specific accounting term; and
(f) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Inden-
ture as a whole and not to any particular Article,
Section or other subdivision.
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ARTICLE TWO
THE NOTES
Section 2.01. Forms and Dating. The Notes and
the Trustee's certificate of authentication thereon shall be
in substantially the form of Exhibit A hereto, with such
appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture
and may have such letters, numbers or other marks of iden-
tification and such legends or endorsements placed thereon
as may be required to comply with any applicable law or with
the rules of any securities exchange or as may, consistently
herewith, be determined by the Officers executing such
Notes, as evidenced by their execution thereof. The Notes
shall be issuable only in registered form without coupons
and only in denominations of $1,000 and integral multiples
thereof.
The definitive Notes and Note Guarantees shall be
printed, typewritten, lithographed or engraved or produced
by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities
exchange on which the Notes may be listed, all as determined
by the Officers executing such Notes, as evidenced by their
execution of such Notes. Each Note shall be dated the date
of its authentication.
The terms and provisions contained in the form of
the Notes, annexed hereto as Exhibit A shall constitute, and
are hereby expressly made, a part of this Indenture and, to
the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
(a) Global Note. The Notes shall be issued
initially in the form of one Global Note (the "Global Note")
in definitive, fully registered form without interest
coupons in substantially the form of Exhibit A, which shall
be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York City
office, as custodian for the Depository, and registered in
the name of the Depository or a nominee of the Depository,
duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal
amount of the Global Note may from time to time be increased
or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee in the limited
circumstances hereinafter provided.
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(b) Certificated Notes. Except as provided in
Section 2.06, owners of beneficial interests in the Global
Note will not be entitled to receive physical delivery of
certificated securities.
Section 2.02. Execution and Authentication. Two
Officers of the Company shall execute the Notes on behalf of
the Company by either manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or
reproduced on the Notes.
If an Officer of the Company whose signature is on
a Note no longer holds that office at the time the Trustee
authenticates the Note or at any time thereafter, the Note
shall be valid nevertheless.
A Note shall not be valid until an authorized
signatory of the Trustee manually signs the certificate of
authentication on the Note. Such signature shall be con-
clusive evidence that the Note has been authenticated under
this Indenture.
The Trustee shall authenticate Notes for original
issue in an aggregate principal amount not to exceed
$115,000,000 upon receipt of an Officers' Certificate of the
Company directing the Trustee to authenticate the Notes and
certifying that all conditions precedent to the issuance of
the Notes contained herein have been complied with. The
aggregate principal amount of Notes outstanding at any time
may not exceed $115,000,000, except as provided in Sections
2.07 and 2.08.
With the approval of the Company, the Trustee may
appoint an authenticating agent acceptable to the Company to
authenticate Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authen-
tication by such agent. Such authenticating agent shall
have the same rights as the Trustee in any dealings here-
under with the Company or with any of the Company's Affil-
iates.
Section 2.03. Registrar and Paying Agent. The
Company shall maintain in New York City an office or agency
where Notes may be presented for registration of transfer or
for exchange (the "Registrar"), an office or agency where
Notes may be presented for payment (the "Paying Agent") and
an office or agency where notices and demands to or upon the
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Company in respect of the Notes and this Indenture may be
served. The Registrar shall keep a register of the Notes
and of their transfer and exchange. The Company may have
one or more co-Registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional
paying agent. Except as otherwise expressly provided in
this Indenture, the Company or any Affiliate thereof may act
as Paying Agent.
The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture,
which shall incorporate the provisions of the TIA. The
agreement shall implement the provisions of this Indenture
that relate to such Agent. The Company shall notify the
Trustee of the name and address of any such Agent. If the
Company fails to maintain a Registrar, Paying Agent or agent
for service of notices and demands, or fails to give the
foregoing notice, the Trustee shall act as such and shall be
entitled to appropriate compensation in accordance with
Section 7.08.
The Company hereby initially appoints the Trustee
as Registrar, Paying Agent and agent for service of notices
and demands in connection with the Notes.
Section 2.04. Paying Agent to Hold Money in
Trust. Each Paying Agent shall hold in trust for the bene-
fit of the Holders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on
the Notes (whether such money has been distributed to it by
the Company or any other obligor on the Notes), and the
Company and the Paying Agent shall notify the Trustee of any
default by the Company (or any other obligor on the Notes)
in making any such payment. If the Company or a Subsidiary
acts as Paying Agent, it shall segregate the money and hold
it as a separate trust fund. The Company at any time may
require a Paying Agent to distribute all money held by it to
the Trustee and account for any funds disbursed and the
Trustee may at any time during the continuance of any
payment default with respect to the Notes, upon written
request to a Paying Agent, require such Paying Agent to pay
all money held by it to the Trustee and to account for any
funds distributed. Upon doing so, the Paying Agent (other
than an obligor under the Notes or any Note Guarantee) shall
have no further liability for the money so paid over to the
Trustee.
Section 2.05. Noteholder Lists. The Trustee
shall preserve in as current a form as is reasonably prac-
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ticable the most recent list available to it of the names
and addresses of the Holders and shall otherwise comply with
TIA Section 312(a). If the Trustee is not the Registrar,
the Company shall furnish to the Trustee at least ten
Business Days before each Interest Payment Date and at such
other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders, which list
may be conclusively relied upon by the Trustee.
Section 2.06. Transfer and Exchange. When Notes
are presented to the Registrar or a co-Registrar with a
request to register the transfer of such Notes or to
exchange such Notes for an equal principal amount of Notes
of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if
its requirements for such transfer or exchange are met;
provided that the Notes surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the
Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing. To permit
registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Notes at the
Registrar's request. No service charge shall be made for
any registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchanges or
transfers pursuant to Sections 2.02, 2.07, 2.10, 3.06, 4.18,
4.19 or 9.05). The Registrar shall not be required to
register the transfer of or exchange of any Note (i) during
a period beginning at the opening of business 15 days before
the mailing of a notice of redemption of Notes and ending at
the close of business on the day of such mailing and (ii)
selected for redemption in whole or in part pursuant to
Article Three, except the unredeemed portion of any Note
being redeemed in part.
With respect to the Global Note:
(1) The Global Note authenticated under this
Indenture shall be registered in the name of the
Depository designated for the Global Note or a nominee
thereof and deposited with such Depository or a nominee
thereof or custodian therefor, and such Global Note
shall constitute a single Note for all purposes of this
Indenture.
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(2) A Global Note may not be transferred except
as a whole by the Depository to a nominee of the
Depository. A Global Note is exchangeable for
certificated Notes only if (i) the Depository notifies
the Company that it is unwilling or unable to continue
as a Depository for such Global Note or if at any time
the Depository ceases to be a clearing agency
registered under the Exchange Act, (ii) the Company
executes and delivers to the Trustee a notice that such
Global Note shall be so transferable, registrable, and
exchangeable, and such transfers shall be registrable
or (iii) there shall have occurred and be continuing an
Event of Default or an event which, with the giving of
notice or lapse of time or both, would constitute an
Event of Default with respect to the Notes represented
by such Global Note. Any Global Note that is
exchangeable for certificated Notes pursuant to the
preceding sentence will be transferred to, and
registered and exchanged for, certificated Notes in
authorized denominations, without legends applicable to
a Global Note, and registered in such names as the
Depository holding such Global Note may direct.
Subject to the foregoing, a Global Note is not
exchangeable, except for a Global Note of like
denomination to be registered in the name of the
Depository or its nominee. In the event that a Global
Note becomes exchangeable for certificated securities,
(x) certificated Notes will be issued only in fully
registered form in denominations of $1,000 or integral
multiples thereof, (y) payment of principal, any
repurchase price, and interest on the certificated
Notes will be payable, and the transfer of the
certificated Notes will be registrable, at the office
or agency of the Company maintained for such purposes,
and (z) no service charge will be made for any
registration or transfer or exchange of the
certificated Notes, although the Company may require
payment of a sum sufficient to cover any tax or
governmental charge imposed in connection therewith.
(3) Notes issued in exchange for a Global Note or
any portion thereof shall have an aggregate principal
amount equal to that of such Global Note or portion
thereof to be so exchanged, shall be registered in such
names and be in such authorized denominations as the
Depository shall designate and shall bear the
applicable legends provided for herein. Any Global
Note to be exchanged in whole shall be surrendered by
the Depository to the Trustee. With respect to any
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Global Note to be exchanged in part, either such Global
Note shall be so surrendered for exchange or, if the
Trustee is acting as custodian for the Depository or
its nominee with respect to such Global Note, the
principal amount thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by
means of an appropriate adjustment made on the records
of the Trustee. Upon any such surrender or adjustment,
the Trustee shall authenticate and deliver the Note
issuable on such exchange to or upon the order of the
Depository or an authorized representative thereof.
(4) Every security authenticated and delivered
upon registration of transfer of, or in exchange for or
in lieu of, a Global Note or any portion mutilated
thereof, whether pursuant to this Section, Section 2.07
or 2.10 or otherwise, shall be authenticated and
delivered in the form of, and shall be, a Global Note,
unless such Note is registered in the name of a Person
other than the Depository for such Global Note or a
nominee thereof.
Members of, or participants in, the Depository
("Participants") shall have no rights under this Indenture
with respect to the Global Note held on their behalf by the
Depository or by the Trustee as the custodian of the
Depository or under such Global Note, and the Depository may
be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as
between the Depository and its Participants, the operation
of customary practices of such Depository governing the
exercise of the rights of a holder of a beneficial interest
in the Global Note.
Section 2.07. Replacement Notes. If a mutilated
Note is surrendered to the Trustee or if the Holder of a
Note claims that the Note has been lost, destroyed or wrong-
fully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the Trustee's require-
ments are met. If required by the Trustee or the Company,
such Holder must provide an indemnity bond or other indem-
nity, sufficient in the judgment of both the Company and the
Trustee, to protect the Company, the Trustee or any Agent
from any loss which any of them may suffer if a Note is
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replaced. The Company and the Trustee may charge such
Holder for its reasonable, out-of-pocket expenses in
replacing a Note, including reasonable fees and expenses of
counsel. Every replacement Note is an additional obligation
of the Company.
Section 2.08. Outstanding Notes. Notes out-
standing at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it,
those delivered to it for cancellation, those described in
this Section 2.08 as not outstanding and those deemed
satisfied pursuant to Article Eight. A Note does not cease
to be outstanding because the Company or any of its
Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07
(other than a mutilated Note surrendered for replacement),
it ceases to be outstanding unless the Trustee receives
proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. A mutilated Note ceases to be out-
standing upon surrender of such Note and replacement thereof
pursuant to Section 2.07.
If on a Redemption Date or a Maturity Date the
Paying Agent (other than the Company or an Affiliate of the
Company) holds cash or U.S. Government Obligations suf-
ficient to pay all of the principal and interest due on the
Notes payable on that date, and is not prohibited from
paying such cash or U.S. Government Obligations to the
Holders of such Notes pursuant to the terms of this Inden-
ture, then on and after that date such Notes cease to be
outstanding and interest on them shall cease to accrue.
Section 2.09. Treasury Notes. In determining
whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent,
Notes owned by the Company or any of its Affiliates shall be
disregarded, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes which the
Trustee knows or has reason to know are so owned shall be
disregarded.
Section 2.10. Temporary Notes. Until definitive
Notes are prepared and ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of defin-
itive Notes but may have variations that the Company con-
siders appropriate for temporary Notes. Without unrea-
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sonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for tem-
porary Notes. Until such exchange, temporary Notes shall be
entitled to the same rights, benefits and privileges as
definitive Notes.
Section 2.11. Cancellation. The Company at any
time may deliver Notes to the Trustee for cancellation. The
Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or
payment. The Trustee, or at the direction of the Trustee,
the Registrar or the Paying Agent (other than the Company or
a Subsidiary of the Company), and no one else, shall cancel
and, at the written direction of the Company, shall dispose
of all Notes surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.07, the Company may not
issue new Notes to replace Notes that it has paid or deliv-
ered to the Trustee for cancellation. If the Company shall
acquire any of the Notes, such acquisition shall not operate
as a redemption or satisfaction of the Indebtedness repre-
sented by such Notes unless and until the same are sur-
rendered to the Trustee for cancellation pursuant to this
Section 2.11.
Section 2.12. Defaulted Interest. If the Company
defaults on a payment of interest on the Notes, it shall pay
the defaulted interest, plus (to the extent permitted by
law) any interest payable on the defaulted interest, in
accordance with the terms hereof, to the Persons who are
Noteholders on a subsequent special record date, which date
shall be at least ten Business Days prior to the payment
date. The Company shall fix such special record date and
payment date in a manner satisfactory to the Trustee. At
least 15 days before such special record date, the Company
shall mail to each Noteholder a notice that states the
special record date, the payment date and the amount of
defaulted interest, and interest payable on such defaulted
interest, if any, to be paid.
The Company may make payment of any defaulted
interest in any other lawful manner not inconsistent with
the requirements (if applicable) of any securities exchange
on which the Notes may be listed, and upon such notice as
may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant
to this paragraph, such manner of payment shall be deemed
practicable by the Trustee.
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Section 2.13. CUSIP Number. The Company in
issuing the Notes may use a "CUSIP" number (if then gen-
erally in use), and if so, the Trustee may use the CUSIP
numbers in notices of redemption or exchange as a con-
venience to Holders; provided that any such notice may state
that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the
Notes, and that reliance may be placed only on the other
identification numbers printed on the Notes. The Company
will promptly notify the Trustee of any change in the CUSIP
number.
Section 2.14. Deposit of Moneys. On or before
each Interest Payment Date and Maturity Date, the Company
shall deposit with the Trustee or Paying Agent in imme-
diately available funds money sufficient to make cash pay-
ments, if any, due on such Interest Payment Date or Maturity
Date, as the case may be, in a timely manner which permits
the Paying Agent to remit payment to the Holders on such
Interest Payment Date or Maturity Date, as the case may be;
provided that the Company may make any such deposit in next
day funds on or before the Business Day before each Interest
Payment Date and Maturity Date.
Section 2.15. Computation of Interest. Interest
payable on the Notes shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
ARTICLE THREE
REDEMPTION OF NOTES
Section 3.01. Notices to the Trustee. If the
Company elects to redeem Notes pursuant to Paragraphs 4(a)
or (b) of the Notes, it shall notify the Trustee of the
Redemption Date and principal amount of Notes to be
redeemed.
The Company shall notify the Trustee by an Offi-
cers' Certificate, stating that such redemption will comply
with the provisions hereof and of the Notes, of any redemp-
tion at least 45 days before the Redemption Date (unless a
shorter notice period shall be satisfactory to the Trustee).
Section 3.02. Selection of Notes to Be Redeemed.
In the event that less than all of the Notes are to be
redeemed at any time, selection of such Notes for redemption
will be made by the Trustee in compliance with the
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requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are
not then listed on a national securities exchange (or if the
Notes are so listed but the exchange does not impose
requirements with respect to the selection of debt
securities for redemption), on a pro rata basis, by lot or
by such other method as the Trustee shall deem fair and
appropriate; provided that no Notes of a principal amount of
$1,000 or less shall be redeemed in part.
The Trustee shall promptly notify the Company and
the Registrar in writing of the Notes selected for redemp-
tion and, in the case of any Notes selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to
redemption of Notes shall relate, in the case of any Note
redeemed or to be redeemed only in part, to the portion of
the principal amount of such Note which has been or is to be
redeemed.
Section 3.03. Notice of Redemption. Notice of
redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior
to the Redemption Date to each Holder of Notes to be
redeemed, at the address of such Holder appearing in the
Note register maintained by the Registrar.
All notices of redemption shall identify the Notes
to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of
accrued interest, if any, to be paid;
(c) that, unless the Company defaults in making
the redemption payment, interest on Notes called for
redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of
such Notes is to receive payment of the Redemption
Price upon surrender to the Paying Agent of the Notes
redeemed;
(d) if any Note is to be redeemed in part only,
the portion of the principal amount (equal to $1,000 or
any integral multiple thereof) of such Note to be
redeemed and that on and after the Redemption Date,
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upon surrender for cancellation of such Note to the
Paying Agent, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion
thereof will be issued without charge to the Note-
holder;
(e) that Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemp-
tion Price and the name and address of the Paying
Agent;
(f) the CUSIP number, if any, relating to such
Notes;
(g) the paragraph of the Notes pursuant to which
the Notes are being redeemed; and
(h) no representation is made as to the accuracy
or correctness of the CUSIP number, if any, listed in
such notice or printed on the Notes.
Notice of redemption of Notes to be redeemed at
the election of the Company shall be given by the Company
or, at the Company's written request, by the Trustee in the
name and at the expense of the Company.
The notice, if mailed in the manner provided
herein, shall be conclusively presumed to have been given,
whether or not the Holder receives such notice. In any
case, failure to give such notice by mail or any defect in
the notice shall not affect the validity of the proceedings
for the redemption of any Note.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Notes called for
redemption become due and payable on the Redemption Date and
at the applicable Redemption Price (expressed as percentages
of principal amount). Upon surrender to the Paying Agent,
such Notes called for redemption shall be paid at the
Redemption Price, plus accrued interest, if any, to the
Redemption Date, but interest installments whose maturity is
on or prior to such Redemption Date will be payable on the
relevant Interest Payment Dates to the Holders of record at
the close of business on the relevant record dates referred
to in the Notes.
Section 3.05. Deposit of Redemption Price. On or
prior to any Redemption Date, the Company shall deposit with
the Paying Agent an amount of money in same day funds suf-
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ficient to pay the Redemption Price of, and accrued interest
on, all the Notes or portions thereof which are to be
redeemed on that date, other than Notes or portions thereof
called for redemption on that date which have been delivered
by the Company to the Trustee for cancellation.
If the Company complies with the preceding para-
graph, then, unless the Company defaults in the payment of
such Redemption Price, interest on the Notes to be redeemed
will cease to accrue on and after the applicable Redemption
Date, whether or not such Notes are presented for payment.
If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and, to
the extent lawful, accrued interest thereon shall, until
paid, bear interest from the Redemption Date at the rate
provided in the Notes.
Section 3.06. Notes Redeemed or Purchased in
Part. Upon surrender to the Paying Agent of a Note which is
to be redeemed in part, the Company shall execute, each Note
Guarantor shall Guarantee and the Trustee shall authenticate
and deliver to the Holder of such Note without service
charge, a new Note or Notes (accompanied by a notation of
Note Guarantee, duly endorsed by each such Note Guarantor),
of any authorized denomination as requested by such Holder
in aggregate principal amount equal to, and in exchange for,
the unredeemed portion of the principal of the Note so
surrendered that is not redeemed.
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Notes. The Company
shall pay, or cause to be paid, the principal of and
interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of
principal or interest shall be considered paid on the date
due if the Trustee or Paying Agent (other than the Company,
a Subsidiary of the Company or any Affiliate of any thereof)
holds on that date money designated for and sufficient to
pay the installment and is not prohibited from paying such
money to the Holders of the Notes pursuant to the terms of
this Indenture.
The Company shall pay interest on overdue
principal at the rate and in the manner provided in the
Notes. The Company shall pay interest on overdue
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installments of interest at the same rate and in the same
manner, to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency where (i) the Notes
and the Note Guarantees may be surrendered for registration
of transfer or exchange, (ii) the Notes and the Note
Guarantees may be presented for payment and (iii) notices
and demands to or upon the Company or any Note Guarantor in
respect of the Notes, the Note Guarantees and this Indenture
may be served. The Company shall give prompt written notice
to the Trustee of the location, and any change in the loca-
tion, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee as set forth in
Section 12.02.
The Company may also from time to time designate
one or more other offices or agencies where the Notes and
the Note Guarantees may be presented or surrendered for any
or all such purposes and may from time to time rescind such
designations; provided that no such designation or rescis-
sion shall in any manner relieve the Company of its obli-
gation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The
Company shall give prompt written notice to the Trustee of
any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby initially designates the office
of the Trustee maintained at 114 West 47th Street, New York,
New York 10036, as such office of the Company in accordance
with this Section 4.02.
Section 4.03. Corporate Existence. Subject to
Article Five, the Company shall do or cause to be done all
things necessary to and shall cause each of its Subsidiaries
to, preserve and keep in full force and effect the
corporate, partnership or limited liability company
existence and rights (charter and statutory), licenses
and/or franchises of the Company and each of its
Subsidiaries; provided that the Company or any of its
Subsidiaries shall not be required to preserve any such
existence (in the case of Subsidiaries), rights, licenses or
franchises if (x) the Company shall reasonably determine
that the preservation thereof is no longer desirable in the
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conduct of the business of the Company and its Subsidiaries
taken as a whole or (y) the loss thereof is not materially
adverse to the Company and its Subsidiaries taken as a whole
or to the ability of the Company to otherwise satisfy its
obligations hereunder; provided, further, however, that the
foregoing shall not prohibit the sale, transfer or
conveyance of a Subsidiary or any of its assets in
compliance with the terms of this Indenture.
Section 4.04. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before any penalty accrues from the failure to
so pay or discharge, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or
any Subsidiary or upon the income, profits or property of
the Company or any Subsidiary, and (b) all material lawful
claims for labor, materials and supplies which, if unpaid,
might by law become a Lien upon the property of the Company
or any Subsidiary except for Permitted Liens; provided,
however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax,
assessment, charge or claim the amount, applicability or
validity of which is being contested in good faith by
appropriate proceedings properly instituted and diligently
conducted and for which adequate provision (in the good
faith judgment of management of the Company) has been made
or where the failure to effect such payment or discharge is
not adverse in any material respect to the Holders or is not
materially adverse to the Company and its Subsidiaries taken
as a whole or to the ability of the Company to otherwise
satisfy its obligations hereunder.
Section 4.05. Maintenance of Properties. The
Company shall, and shall cause each of its Subsidiaries to,
cause all material properties and assets to be maintained
and kept in good condition, repair and working order
(ordinary wear and tear excepted) and supplied with all
necessary equipment, and shall cause to be made all
necessary repairs, renewals, replacements, additions,
betterments and improvements thereto, as shall be reasonably
necessary for the proper conduct of its business; provided
that nothing in this Section 4.05 shall prevent the Company
or any Subsidiary from discontinuing the operation and
maintenance of any of its properties (x) if such
discontinuance is, in the judgment of the Company or of such
Subsidiary, desirable in the conduct of its business or (y)
if such discontinuance or disposal is not materially adverse
to the Company and its Subsidiaries taken as a whole or the
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ability of the Company to otherwise satisfy its obligations
hereunder.
Section 4.06. Compliance Certificate. (a) The
Company shall deliver to the Trustee within 90 days after
the end of each fiscal year an Officers' Certificate stating
whether or not the signers know of any Default or Event of
Default under this Indenture that occurred during such
fiscal period. If they do know of such a Default or Event
of Default, the certificate shall describe any such Default
or Event of Default and its status. One of the persons
signing the Officers' Certificate given pursuant to this
Section 4.06 shall be the principal executive, financial or
accounting officer of the Company, in compliance with TIA
Section 314(a)(4).
(b) The Company shall deliver to the Trustee as
soon as possible, and in any event within 30 days after the
Company becomes aware or should reasonably have become aware
of the occurrence of any Default or Event of Default, an
Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to
take with respect thereto.
Section 4.07. Waiver of Stay, Extension or Usury
Laws. The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law or any usury law
or other law which would prohibit or forgive the Company
from paying all or any portion of the principal of or
interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) the Company
hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee,
but will suffer and permit the execution of every such power
as though no such law had been enacted.
Section 4.08. Limitation on Indebtedness.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, Incur any Indebtedness (including
Acquired Indebtedness), unless such Incurrence is by the
Company, and on the date of such Incurrence the Consolidated
Coverage Ratio would be greater than 2.0:1.0, if such
Indebtedness is Incurred on or prior to December 31, 1998
and 2.25:1.0 if such Indebtedness is Incurred thereafter.
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(b) Notwithstanding the foregoing paragraph (a),
the Company and, to the extent specifically set forth below,
its Restricted Subsidiaries may Incur the following
Indebtedness:
(i) Indebtedness of the Company or Swiss
Subholding under the Credit Agreement in an aggregate
principal amount at any time outstanding not to exceed
(x) an amount of term loan borrowings thereunder equal
to (1) the aggregate principal amount of term loan
borrowings by the Company or Swiss Subholding
outstanding under the Credit Agreement on the Issue
Date minus (2) the aggregate amount of all scheduled
repayments and mandatory repayments of term loan
borrowings thereunder, whether or not actually made
(unless any such repayment is waived or the relevant
provision requiring any such repayment is amended by
the lenders thereunder in accordance therewith), and
all other repayments of term loan borrowings actually
made thereunder (other than to the extent refinanced by
an equal principal amount of Indebtedness Incurred
under this clause (i)) plus (3) if such term loan
borrowings are refinanced pursuant to this clause (i),
an amount of Refinancing Costs paid in connection with
such refinancing, plus (y) $140,000,000 of revolving
credit borrowings thereunder (minus the aggregate
amount of Indebtedness of Non-U.S. Restricted
Subsidiaries Incurred pursuant to clause (xvii) of this
paragraph (b)), provided that
(A) the aggregate principal amount of term
loan borrowings by Swiss Subholding
outstanding under the Credit Agreement
at any time outstanding shall not exceed
an amount equal to (x) the aggregate
principal amount of term loan borrowings
by Swiss Subholding outstanding under
the Credit Agreement on the Issue Date
plus (y) if such term loan borrowings
are refinanced pursuant to this clause
(i), an amount of Refinancing Costs paid
in connection with such refinancing,
(B) any Indebtedness Incurred by Swiss
Subholding to renew, extend, substitute
for, refinance or replace (each, for
purposes of this clause (i), to
"refinance") any Indebtedness under the
Credit Agreement shall be Incurred only
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in a transaction exempt from
registration requirements under United
States securities laws, and not pursuant
to a public offering in the United
States of America, and shall not be so
registered for resale in a public
offering in the United States of
America, and
(C) for purposes of determining the
outstanding principal amount of term
loan Indebtedness under this clause (i),
the aggregate principal amount of term
loan Indebtedness that is Incurred (x)
to refinance term loan Indebtedness
under the Credit Agreement and (y) in a
different currency from the Indebtedness
being refinanced, shall be calculated
based on the relevant currency exchange
rate in effect on the date of such
refinancing;
(ii) Indebtedness of the Company pursuant to the
Notes, Indebtedness of any Note Guarantor pursuant to
its Note Guarantee, and Indebtedness of any other
Restricted Subsidiary with respect to the Notes arising
by reason of any Lien granted by such Subsidiary to
secure the Notes;
(iii) Indebtedness of the Company or any
Restricted Subsidiary outstanding on the Issue Date
(other than Indebtedness under or in respect of the
Credit Agreement);
(iv) Indebtedness of the Company owing to and
held by any Restricted Subsidiary or Indebtedness of a
Restricted Subsidiary owing to and held by the Company
or any Restricted Subsidiary; provided, however, that
(x) any such Indebtedness is made pursuant to an
intercompany note, (y) any such Indebtedness of the
Company or any Note Guarantor is Subordinated
Indebtedness that is subordinated to the Notes or to
the applicable Note Guarantee as provided in such
intercompany note, and in any event at least to the
same extent as the Notes are subordinated to Senior
Indebtedness, and (z) any subsequent transfer of any
such Indebtedness (except to the Company or a
Restricted Subsidiary) will be deemed, in each case, to
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constitute the Incurrence of such Indebtedness by the
issuer thereof;
(v) Acquisition Indebtedness of any Non-U.S.
Restricted Subsidiary Incurred after the Issue Date
(and not for the purpose of financing the Acquisition),
provided that (x) at the time of such Incurrence and
after giving effect thereto on a pro forma basis,
(A) no Default or Event of Default will have occurred
and be continuing or would result therefrom and (B) the
Company could Incur $1.00 of additional Indebtedness
pursuant to paragraph (a) above and (y) such
Indebtedness (unless Incurred by a Note Guarantor)
shall be Incurred only in a transaction exempt from
registration requirements under United States
securities laws, and not pursuant to a public offering
in the United States of America, and shall not be so
registered for resale in a public offering in the
United States of America;
(vi) Acquired Indebtedness of any Restricted
Subsidiary, provided that at the time of such
Incurrence and after giving effect thereto on a pro
forma basis, (x) no Default or Event of Default will
have occurred and be continuing or would result
therefrom and (y) the Company could Incur $1.00 of
additional Indebtedness pursuant to paragraph (a)
above;
(vii) Indebtedness of any Restricted Subsidiary
that is a Note Guarantor, provided that at the time of
such Incurrence and after giving effect thereto on a
pro forma basis, (x) no Default or Event of Default
will have occurred and be continuing or would result
therefrom and (y) the Company could Incur $1.00 of
additional Indebtedness pursuant to paragraph (a)
above;
(viii) Obligations of the Company or any
Restricted Subsidiary entered into in the ordinary
course of business (A) under Interest Rate Agreements
designed to protect such Person against fluctuations in
interest rates in respect of Indebtedness of such
Person permitted to be incurred under this Indenture,
which obligations do not exceed the aggregate principal
amount of such Indebtedness, and (B) under Currency
Agreements designed to protect such Person against
fluctuations in foreign currency exchange rates in
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respect of foreign exchange exposures incurred by such
Person;
(ix) Obligations of the Company or any Restricted
Subsidiary in respect of (A) judgment, performance,
surety and other bonds provided by such Person with
respect to obligations of such Person in the ordinary
course of business, and (B)(x) letters of credit
securing obligations incurred in the ordinary course of
business or (y) other letters of credit in an amount
not to exceed $5,000,000 in the aggregate outstanding
at any time;
(x) Indebtedness of the Company or any Restricted
Subsidiary arising from the honoring of a check, draft
or similar instrument of such Person drawn against
insufficient funds, provided that such Indebtedness is
extinguished within five Business Days of its
incurrence;
(xi) (A) Indebtedness of the Company or any
Restricted Subsidiary consisting of Capitalized Lease
Obligations, Purchase Money Obligations or Capital
Expenditure Indebtedness (including refinancings
thereof), in an aggregate principal amount outstanding
at any time for all such Indebtedness not exceeding 5%
of Consolidated Assets, and (B) other Capital
Expenditure Indebtedness of any Non-U.S. Restricted
Subsidiary so long as at the time of Incurrence thereof
and after giving effect thereto on a pro forma basis,
(x) no Default or Event of Default will have occurred
and be continuing or would result therefrom and (y) the
Company could Incur $1.00 of additional Indebtedness
pursuant to paragraph (a) above; provided that any
Indebtedness described in this clause (xi) Incurred by
a Restricted Subsidiary (other than a Note Guarantor)
shall be Incurred only in a transaction exempt from
registration requirements under United States
securities laws, and not pursuant to a public offering
in the United States of America, and shall not be so
registered for resale in a public offering in the
United States of America;
(xii) Indebtedness of the Company or any
Restricted Subsidiary that is a Note Guarantor (other
than Indebtedness permitted to be Incurred pursuant to
paragraph (a) above or any other clause of this
paragraph (b)) not to exceed $10,000,000 in aggregate
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principal amount outstanding at any given time for all
such Indebtedness;
(xiii) Indebtedness of any Non-U.S. Restricted
Subsidiary (other than Indebtedness permitted to be
Incurred pursuant to any other clause of this paragraph
(b)) not to exceed $25,000,000 in aggregate principal
amount outstanding at any given time for all such
Indebtedness;
(xiv) Indebtedness of the Company or any
Restricted Subsidiary consisting of guarantees,
indemnities or obligations in respect of purchase price
adjustments, in connection with the disposition of
assets permitted under this Indenture, in a principal
amount not to exceed the gross proceeds actually
received by the Company or any Restricted Subsidiary in
connection with such disposition;
(xv) (1) Guarantees of the Company or any
Restricted Subsidiary of Specified Senior Indebtedness
that is otherwise permitted to be Incurred in
accordance with this covenant, (2) Permitted Guarantees
and (3) Guarantees of the Company or any Restricted
Subsidiary (x) of Specified Indebtedness that is
otherwise permitted to be Incurred in accordance with
this covenant and (y) that are permitted to be Incurred
in accordance with Section 4.12;
(xvi) Indebtedness of the Company or any
Restricted Subsidiary (A) with respect to any Specified
Senior Indebtedness that is otherwise permitted to be
Incurred in accordance with this covenant, to the
extent arising by reason of any Lien granted by such
Person to secure such Specified Senior Indebtedness,
(B) with respect to any Pari Passu Indebtedness that is
otherwise permitted to be Incurred in accordance with
this covenant, to the extent arising by reason of any
Permitted Lien granted by such Person to secure such
Pari Passu Indebtedness, or (C) with respect to any
Specified Indebtedness that is otherwise permitted to
be Incurred in accordance with this covenant, to the
extent arising by reason of any Lien granted by such
Person to secure such Specified Indebtedness in
accordance with Section 4.11;
(xvii) Indebtedness of any Non-U.S. Restricted
Subsidiary to the extent that the amount of such
Indebtedness would be permitted as revolving credit
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borrowing under the Credit Agreement, provided that the
aggregate amount of such Indebtedness shall reduce the
amount of revolving credit borrowings permitted to be
Incurred under the Credit Agreement for purposes of
clause (i)(y) of this paragraph (b); and
(xviii) Any renewals, extensions, substitutions,
refinancings or replacements (each, for purposes of
this clause (xviii), a "refinancing") of any
Indebtedness described in paragraph (a) or clause (ii),
(iii), (v), (vi), (vii) or (xi)(B) of this paragraph
(b), including any successive refinancings, so long as
(A) any such new Indebtedness shall be in principal
amount that does not exceed the principal amount (or,
if such Indebtedness being refinanced provides for an
amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration thereof,
such lesser amount as of the date of determination) so
refinanced plus the lesser of (I) the stated amount of
any premium or other payment required to be paid in
connection with such a refinancing pursuant to the
terms of the Indebtedness being refinanced and (II) the
amount of premium or other payment actually paid at
such time to refinance the Indebtedness, plus, in
either case, the amount of expenses of the Company or a
Restricted Subsidiary incurred in connection with such
refinancing; (B) in the case of any refinancing of Pari
Passu Indebtedness or Subordinated Indebtedness, such
new Indebtedness is made pari passu with or subordinate
in right of payment to the Notes and the Note
Guarantees, as applicable, at least to the same extent
as the Indebtedness being refinanced; (C) such new
Indebtedness has an Average Life equal to or longer
than the Average Life of the Indebtedness being
refinanced and a final Stated Maturity the same as or
later than the final Stated Maturity of the
Indebtedness being refinanced; and (D) in the case of
any refinancing of Indebtedness described in clause
(v), (vi) or (xi)(B) of this paragraph (b), such new
Indebtedness shall be Incurred (other than by a Note
Guarantor) only in a transaction exempt from
registration requirements under United States
securities laws, and not pursuant to a public offering
in the United States of America, and shall not be so
registered for resale in a public offering in the
United States of America, provided, that this clause
(D) shall not apply in respect of clause (vi) to the
extent that the Acquired Indebtedness being refinanced
was Incurred in such a registered transaction or public
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offering so long as the obligor in respect of such
Indebtedness does not change as a result of such
refinancing.
(c) For purposes of determining compliance with,
and the outstanding principal amount of any particular
Indebtedness Incurred pursuant to and in compliance with,
this covenant, (i) Indebtedness Incurred pursuant to the
Credit Agreement on the Issue Date shall be treated as
Incurred pursuant to clause (i) of the foregoing paragraph
(b), (ii) any other obligation of the obligor on such
Indebtedness arising under any Guarantee, Lien or letter of
credit supporting such Indebtedness shall be disregarded to
the extent that such Guarantee, Lien or letter of credit
secures the principal amount of such Indebtedness; (iii) in
the event that Indebtedness meets the criteria of more than
one of the types of Indebtedness described in paragraph (b),
subject to clause (i) of this paragraph (c), the Company, in
its sole discretion, shall classify such item of
Indebtedness and only be required to include the amount and
type of such Indebtedness in one of such clauses; and (iv)
the amount of Indebtedness issued at a price that is less
than the principal amount thereof shall be equal to the
amount of the liability in respect thereof determined in
accordance with GAAP.
(d) For purposes of determining compliance with
any Dollar-denominated restriction on the Incurrence of
Non-Dollar Indebtedness under clause (ix)(B)(y), (xi)(A),
(xii) or (xiii) of the foregoing paragraph (b), the Dollar-
equivalent principal amount of such Indebtedness Incurred
pursuant thereto shall be calculated based on the relevant
currency exchange rate in effect on the date that such
Indebtedness was Incurred, in the case of term debt, or
first committed, in the case of revolving credit debt,
provided that (x) the Dollar-equivalent principal amount of
any such Indebtedness outstanding on the Issue Date shall be
calculated based on the relevant currency exchange rate in
effect on the Issue Date and (y) if such Indebtedness is
Incurred to refinance Non-Dollar Indebtedness previously
Incurred pursuant to clause (ix)(B)(y), (xi)(A), (xii) or
(xiii) of the foregoing paragraph (b), and such refinancing
would cause the Dollar-denominated restriction under such
respective clause to be exceeded if calculated at the
relevant currency exchange rate in effect on the date of
such refinancing, such Dollar-denominated restriction shall
be deemed not to have been exceeded so long as the principal
amount of such refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced, but
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the ability to make subsequent Incurrences of Indebtedness
subject to the Dollar-denominated restriction under such
respective clause shall be determined as if the relevant
currency exchange rate applied to any such previous
refinancing was the rate in effect on the date of such
refinancing. The principal amount of any such refinancing
Indebtedness, if Incurred in a different currency from the
Indebtedness being refinanced, shall be calculated based on
the currency exchange rate applicable to the currencies in
which such respective Indebtedness is denominated that is in
effect on the date of such refinancing.
Section 4.09. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly,:
(i) declare or pay any dividend or make any other
distribution or payment on or in respect of Capital
Stock of the Company (including any payment in
connection with any merger or consolidation involving
the Company or any Restricted Subsidiary), or any other
payment to the direct or indirect holders of Capital
Stock of the Company in their capacity as such, except
dividends or distributions payable solely in Capital
Stock of the Company (other than Redeemable Capital
Stock);
(ii) declare or pay any dividend or make any
other distribution or payment on or in respect of
Capital Stock of any Restricted Subsidiary (including
any payment in connection with any merger or
consolidation involving the Company or any Restricted
Subsidiary), or any other payment to the direct or
indirect holders of Capital Stock of any Restricted
Subsidiary in their capacity as such, except dividends
or distributions payable (x) on a pro rata basis to all
such holders of such Capital Stock, whether in Capital
Stock of such Restricted Subsidiary or otherwise, or
(y) to the Company or any Restricted Subsidiary;
(iii) purchase, redeem, defease or otherwise
acquire or retire for value any Capital Stock of the
Company or any Restricted Subsidiary held by Persons
other than the Company or a Restricted Subsidiary,
except from all holders of such Capital Stock of a
Restricted Subsidiary on a pro rata basis;
(iv) make any principal payment on, or purchase,
defease, repurchase, redeem or otherwise acquire or
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retire for value, prior to any scheduled maturity,
scheduled repayment, scheduled sinking fund payment or
other Stated Maturity, any Subordinated Indebtedness of
the Company or any Note Guarantor (other than in
anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case
due within one year of the date of such acquisition or
retirement); or
(v) make any Investment (other than any Permitted
Investment) in any Person (any such dividend,
distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Investment
being herein referred to as a "Restricted Payment") if
at the time of and after giving effect to such
Restricted Payment on a pro forma basis, (1) a Default
or Event of Default shall have occurred and be
continuing or would result therefrom; (2) the Company
could not Incur at least $1.00 of additional
Indebtedness under Section 4.08(a); or (3) the
aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made from and
after the Issue Date would exceed, without duplication,
the sum of:
(A) 50% of the Consolidated Net Income
accrued during the period (treated as one accounting
period) from October 1, 1996 to the end of the most
recent fiscal quarter ending prior to the date of such
Restricted Payment for which consolidated financial
statements of the Company are available (or, if such
Consolidated Net Income for such period will be a
deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received
by the Company either (x) as capital contributions in
the form of common equity to the Company after the
Issue Date or (y) from the issuance or sale of Capital
Stock (other than Redeemable Capital Stock) of the
Company after the Issue Date, other than to a
Subsidiary of the Company;
(C) the amount equal to the net reduction in
Investments in Unrestricted Subsidiaries resulting from
(i) payments of dividends, repayments of the principal
of loans or advances or other transfers of assets to
the Company or any Restricted Subsidiary from any
Unrestricted Subsidiary or (ii) the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries
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(valued in each case as provided in the definition of
"Investment"), not to exceed in the case of any such
Unrestricted Subsidiary the aggregate amount of
Investments (other than Permitted Investments) made by
the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary after the Issue Date;
(D) in the case of disposition or repayment
of any Investment constituting a Restricted Payment
made after the Issue Date, an amount equal to the
lesser of the return of capital with respect to such
Investment and the initial amount of such Investment,
in either case, less the cost of the disposition of
such Investment; and
(E) the aggregate net cash proceeds received
after the Issue Date by the Company or any Restricted
Subsidiary from the issuance or sale (other than to any
Restricted Subsidiary) of debt securities or Redeemable
Capital Stock that have been converted into or
exchanged for Capital Stock of the Company (other than
Redeemable Capital Stock) to the extent such debt
securities or Redeemable Capital Stock were originally
sold for cash, together with the aggregate net cash
proceeds received by the Company or any Restricted
Subsidiary from such conversion or exchange at the time
thereof.
(b) The provisions of the foregoing paragraph (a)
shall not prohibit:
(i) the payment of any dividend within 60 days
after the date of its declaration, if at the date of
declaration such payment would be permitted by the
foregoing paragraph (a), provided, however, that such
dividend will be included in the calculation of the
amount of Restricted Payments;
(ii) the redemption, repurchase or other
acquisition or retirement of any shares of any class of
Capital Stock of the Company or any Restricted
Subsidiary in exchange for (including any such exchange
pursuant to the exercise of a conversion right or
privilege in connection with which cash is paid in lieu
of the issuance of fractional shares), or out of the
Net Cash Proceeds received by the Company of, a
substantially concurrent issue and sale of other shares
of Capital Stock (other than Redeemable Capital Stock,
in the case of any such redemption, repurchase or other
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acquisition or retirement of Capital Stock that is not
Redeemable Capital Stock) of MT Investors, Holding or
the Company to any Person (other than to a Subsidiary
of the Company), provided that (x) such Net Cash
Proceeds will be excluded from clause (3) of the
foregoing paragraph (a) and (y) such redemption,
repurchase or other acquisition or retirement will be
excluded in the calculation of the amount of Restricted
Payments;
(iii) any redemption, repurchase or other
acquisition or retirement of Subordinated Indebtedness
of the Company or any Note Guarantor in exchange for,
or out of the Net Cash Proceeds received by the Company
of, a substantially concurrent issue and sale of
(x) Capital Stock (other than Redeemable Capital Stock)
of MT Investors, Holding or the Company to any Person
(other than to a Subsidiary of the Company), provided
that such Net Cash Proceeds will be excluded from
clause (3) of the foregoing paragraph (a), or (y)
Indebtedness of the Company or any Note Guarantor so
long as such Indebtedness complies with subclauses (B)
and (C) of Section 4.08(b)(xviii); provided, however,
that such redemption, repurchase or other acquisition
or retirement will be excluded in the calculation of
the amount of Restricted Payments;
(iv) (A) loans, advances, dividends or
distributions by the Company to Holding or MT Investors
(x) not to exceed $1,000,000 in any fiscal year to
permit Holding or MT Investors to pay the operational
expenses (including professional fees and expenses)
incurred by Holding or MT Investors in the ordinary
course of business to the extent related to Holding's
investment in the Company or MT Investors' investment
in Holding, respectively, or (y) not to exceed an
amount necessary to permit Holding or MT Investors to
pay its expenses incurred in connection with any public
offering of equity securities or of Indebtedness
permitted by this Indenture that has been terminated by
the board of directors of the Company, Holding or MT
Investors, as applicable, in each case, the net
proceeds of which were specifically intended to be
contributed or loaned to the Company, and (B) loans or
advances by the Company to Holding or MT Investors not
to exceed an amount necessary to permit each of Holding
and MT Investors to pay its interim expenses incurred
in connection with any public offering of equity
securities or Indebtedness permitted by this Indenture,
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the net proceeds of which are specifically intended to
be contributed or loaned to the Company, which loans or
advances, unless such offering shall have been
terminated by the board of directors of the Company,
Holding or MT Investors, as applicable, shall be repaid
to the Company promptly out of the proceeds of such
offering; provided, however, that such amounts will be
excluded in the calculation of the amount of Restricted
Payments;
(v) loans, advances, dividends or distributions
by the Company to Holding or MT Investors to permit
Holding or MT Investors, as the case may be, to
repurchase or otherwise acquire its common stock or
options or other rights in respect thereof, or payments
by the Company to repurchase or otherwise acquire such
common stock or options or other rights in respect
thereof, in connection with the repurchase provisions
under employee stock option agreements or employee
stock purchase agreements, such payments, loans,
advances, dividends or distributions not to exceed
$2,000,000 in any fiscal year and $5,000,000 in the
aggregate; provided, however, that such amounts will be
included in the calculation of the amount of Restricted
Payments;
(vi) loans or advances to officers or employees
of MT Investors, Holding, the Company or any Restricted
Subsidiary in the ordinary course of business not to
exceed $2,000,000 in the aggregate outstanding at any
time, provided, however, that such amounts will be
excluded in the calculation of the amount of Restricted
Payments;
(vii) payments pursuant to the Tax Sharing
Agreement, provided, however, that such payments will
be excluded in the calculation of the amount of
Restricted Payments;
(viii) payments by the Company to Holding or MT
Investors not to exceed an amount necessary to permit
Holding or MT Investors to make payments in respect of
its indemnification obligations owing to its directors
or officers under Holding's or MT Investors' charter,
by-laws or indemnification agreements, to the extent
such payments relate to the Company or any of its
Restricted Subsidiaries or to Holding's or MT
Investors's investment therein, provided, however, that
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such payments will be excluded in the calculation of
the amount of Restricted Payments;
(ix) the payment by the Company of, or loans,
advances, dividends or distributions by the Company to
Holding or MT Investors to pay, dividends on the common
stock of the Company, Holding or MT Investors, as
applicable, following an initial public offering of
such common stock, in an amount not to exceed in any
fiscal year 6% of the net proceeds received by the
Company, in or from such public offering; provided,
however, that such payments, loans, advances, dividends
or distributions will be included in the calculation of
the amount of Restricted Payments;
(x) payments by the Company, or payments by the
Company to Holding or MT Investors to enable Holding or
MT Investors, as applicable, to make payments, to
holders of the common stock of the Company, Holding or
MT Investors, as applicable, in lieu of issuance of
fractional shares of such common stock, in connection
with any recapitalization of the Company, Holding or MT
Investors, as applicable, such payments not to exceed
$100,000 in the aggregate; provided, however, that such
payments will be included in the calculation of the
amount of Restricted Payments; or
(xi) any purchase or repayment of Subordinated
Indebtedness upon a Change of Control or an Asset Sale
to the extent required by the agreement governing such
Subordinated Indebtedness but only if (x) in the case
of a Change of Control, the Company shall have complied
with all of its obligations under Section 4.19 and
purchased all Notes tendered pursuant to the offer to
repurchase all the Notes required thereby prior to
purchasing or repaying such Subordinated Indebtedness
or (y) in the case of an Asset Sale, the Company shall
have applied the Net Cash Proceeds from such Asset Sale
in accordance with Section 4.18, shall have made an
Excess Proceeds Offer pursuant to such covenant, and
shall have purchased all Notes tendered pursuant to
such Excess Proceeds Offer prior to purchasing or
repaying such Subordinated Indebtedness, provided that
(1) in either case the purchase price (stated as a
percentage of principal amount or issue price plus
accrued original issue discount, if less) of such
Subordinated Indebtedness shall not be greater than the
price (stated as a percentage of principal amount) of
the Notes pursuant to any such offer to repurchase the
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Notes in the event of a Change of Control or Excess
Proceeds Offer, respectively, (2) in the case of such
Asset Sale, the aggregate principal amount of such
Subordinated Indebtedness that the Company may so
purchase or repay may not exceed the amount of the
Excess Proceeds, if any, available for such Excess
Proceeds Offer and remaining after the Company shall
have purchased all Notes tendered pursuant to such
Excess Proceeds Offer, and (3) in either case, any such
purchase or repayment will be included in the
calculation of the amount of Restricted Payments.
Section 4.10. Limitation on Transactions with
Affiliates. (a) The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly,
conduct any business, enter into or suffer to exist any
transaction or series of related transactions (including the
purchase, sale, conveyance, disposition, lease or exchange
of any property, the rendering of any service or the making
of any loan or advance) with, or for the benefit of, any
Affiliate of the Company (an "Affiliate Transaction") unless
(i) such Affiliate Transaction is on terms no less favorable
to the Company or such Restricted Subsidiary than those that
could be obtained at the time of such Affiliate Transaction
in a comparable arm's length transaction with a Person who
is not an Affiliate of the Company, and (ii) in the event
such an Affiliate Transaction involves aggregate payments or
value of $5,000,000 or greater, (x) a majority of the Board
of Directors of the Company, including a majority of the
Disinterested Directors, have determined in good faith that
the criteria set forth in clause (i) are satisfied and have
approved the relevant Affiliate Transaction, such approval
to be evidenced by a Board Resolution, or (y) in the event
there are no Disinterested Directors, the Company has
obtained a written opinion of an investment banking firm or
an independent appraiser or accounting firm, in either case
that is nationally recognized in the United States of
America, stating that the terms of such Affiliate
Transaction are fair to the Company and its Restricted
Subsidiaries from a financial point of view (a "Fairness
Opinion"), and (iii) in the event that such Affiliate
Transaction involves aggregate payments or value of
$15,000,000 or greater, the Company has obtained a Fairness
Opinion with respect to such Affiliate Transaction and (iv)
in the event that such Affiliate Transaction involves
aggregate payments or value of $5,000,000 or greater, the
Company has delivered to the Trustee an Officers'
Certificate certifying that such Affiliate Transaction
complies with the foregoing clause (i), and that, if
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required by the foregoing clause (ii) or (iii), such
Affiliate Transaction has been approved by the Board of
Directors (including a majority of the Disinterested
Directors) or the Company has obtained a Fairness Opinion
with respect thereto, together with copies of the relevant
Board Resolution or Fairness Opinion.
(b) The foregoing paragraph (a) will not apply
to: (i) any transaction permitted as a Restricted Payment
pursuant to Section 4.09, (ii) the payment of reasonable and
customary regular fees to directors of the Company and its
Restricted Subsidiaries who are not employees of the Company
or its Subsidiaries, (iii) any transaction between the
Company and a Restricted Subsidiary or between Restricted
Subsidiaries, (iv) any transaction with an officer or member
of the board of directors of the Company or any Restricted
Subsidiary in the ordinary course of business involving
compensation, indemnity or employee benefit arrangements;
(v) loans or advances to officers of the Company or any
Restricted Subsidiary in the ordinary course of business not
exceeding $2,000,000 in the aggregate outstanding at any
time; (vi) payments pursuant to the Tax Sharing Agreement;
(vii) any agreement as in existence on the Issue Date, as
the same may be amended from time to time in any manner not
adverse to the Holders; and (viii) payment to AEA of fees in
an aggregate amount not to exceed $1,000,000 in any fiscal
year and the reimbursement of reasonable out-of-pocket
expenses incurred by AEA, in each case in connection with
its performance of services pursuant to the Management
Services Agreement; (ix) the Acquisition and all
transactions related thereto (including but not limited to
the financing thereof); and (x) any transaction in the
ordinary course of business or approved by a majority of the
Disinterested Directors, between the Company or any
Restricted Subsidiary and any Affiliate of the Company
controlled by the Company that is a joint venture or similar
entity primarily engaged in a Related Business.
Section 4.11. Limitation on Certain Liens.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create,
incur, assume or suffer to exist any Lien (other than any
Permitted Lien) on or with respect to any of its property or
assets (including any Capital Stock), whether held on the
Issue Date or thereafter acquired, or any income, profits or
proceeds therefrom, securing any Specified Indebtedness,
unless (x) effective provision is made contemporaneously
therewith to secure the Notes and the Note Guarantees, as
applicable, (i) in the case of a Lien securing Subordinated
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Indebtedness, by a perfected Lien on such property, assets,
income, profits or proceeds that is senior in priority to
such Lien securing such Indebtedness, or (ii) in the case of
a Lien securing any other Specified Indebtedness, equally
and ratably with (or prior to) such Lien securing such
Indebtedness and (y) any such Restricted Subsidiary is a
Note Guarantor.
(b) Notwithstanding the foregoing, any Lien
created for the benefit of the Notes and the Note
Guarantees, as applicable, pursuant to the foregoing
paragraph (a) shall provide by its terms that such Lien
shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer to any
Person not an Affiliate of the Company of all of the Capital
Stock held by the Company or any Restricted Subsidiary in,
or all or substantially all the assets of, any Restricted
Subsidiary creating such Lien (which sale, exchange or
transfer is not prohibited by this Indenture) or (ii) the
release and discharge of such Lien, which release and
discharge occurs at a time when (A) no other Specified
Indebtedness remains secured by such property or assets of
the Company or such Restricted Subsidiary, as the case may
be, or (B) the holders of all such other Specified
Indebtedness that is secured by such property or assets of
the Company or such Restricted Subsidiary also release their
security interest in such property or assets.
Section 4.12. Limitation on Certain Guarantees.
(a) The Company will not permit any Restricted Subsidiary,
directly or indirectly, to Guarantee any Specified
Indebtedness (other than any Permitted Guarantee) unless
such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture to this Indenture
providing for a Note Guarantee by such Restricted Subsidiary
on substantially the same terms as set forth in Article Ten
of this Indenture with respect to the Note Guarantee of
Holding, provided that if such Specified Indebtedness is
Subordinated Indebtedness, such Restricted Subsidiary's
Guarantee with respect to such Specified Indebtedness shall
be subordinated in right of payment to such Restricted
Subsidiary's Note Guarantee substantially to the same extent
as such Specified Indebtedness is subordinated to the Notes
or any Note Guarantee, as the case may be, or (if not so
subordinated) to any other Indebtedness of such Restricted
Subsidiary.
(b) Notwithstanding the foregoing, any Note
Guarantee by a Restricted Subsidiary of the Notes shall
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provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale,
exchange or transfer to any Person not an Affiliate of the
Company of all of the Capital Stock held by the Company or
any Restricted Subsidiary in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by this Indenture) or
(ii) the release and discharge of the Guarantee that
resulted in the creation of such Note Guarantee, except a
discharge or release by or as a result of payment under such
Guarantee, which release and discharge occurs at a time when
(A) no other Specified Indebtedness remains Guaranteed by
such Restricted Subsidiary (other than pursuant to Permitted
Guarantees) or (B) the holders of all such other
Indebtedness that is Guaranteed by such Restricted
Subsidiary (other than pursuant to Permitted Guarantees)
also release their Guarantee by such Restricted Subsidiary,
except a release as a result of payment pursuant to such
Guarantee by such Restricted Subsidiary.
Section 4.13. Certain Future Note Guarantors.
(a) The Company shall cause (x) certain U.S. Restricted
Subsidiaries, as provided in Section 4.17, and (y) each U.S.
Restricted Subsidiary that Incurs Indebtedness (other than
Specified U.S. Subsidiary Indebtedness), to execute and
deliver to the Trustee a supplemental indenture pursuant to
which such Subsidiary shall Guarantee payment of the Notes
on substantially the same terms as set forth in Article Ten
of this Indenture with respect to the Note Guarantee of
Holding. The Company also shall have the right to cause any
Restricted Subsidiary to execute and deliver to the Trustee
a supplemental indenture pursuant to which such Restricted
Subsidiary will Guarantee payment of the Notes as aforesaid.
Each Note Guarantee shall be limited to an amount not to
exceed the maximum amount that can be Guaranteed by that
Subsidiary without rendering the Note Guarantee, as it
relates to such Subsidiary, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
For purposes of clause (x) of this paragraph (a), the
Company shall have the right to designate the U.S.
Restricted Subsidiary or U.S. Restricted Subsidiaries that
constitute a U.S. Significant Subsidiary or U.S. Significant
Subsidiaries, as the case may be, required to provide a Note
Guarantee or Note Guarantees thereunder, provided that,
after giving effect to such Note Guarantee or Note
Guarantees, there shall not be in existence any U.S.
Restricted Subsidiary that is a U.S. Significant Subsidiary.
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(b) Notwithstanding the foregoing, any Note
Guarantee by a Restricted Subsidiary shall provide by its
terms that it shall be automatically and unconditionally
released and discharged upon (i) any sale, exchange or
transfer to any Person not an Affiliate of the Company of
all of the Capital Stock held by the Company in, or all or
substantially all the assets of, such Restricted Subsidiary
(which sale, exchange or transfer is not prohibited by this
Indenture) or (ii) in the case of any such Guarantee given
by reason of clause (y) of the first sentence of the
foregoing paragraph (a), the repayment in full of the
Indebtedness that caused such Restricted Subsidiary to
provide such Note Guarantee, which repayment occurs at a
time when such Restricted Subsidiary has no obligation in
respect of any other Indebtedness (other than Specified U.S.
Subsidiary Indebtedness) and would not otherwise be required
to Guarantee the Notes under any provision of this
Indenture.
Section 4.14. Limitation on Other Senior Sub-
ordinated Indebtedness. The Company shall not, and shall
not permit any Restricted Subsidiary that is a Note
Guarantor to, directly or indirectly, Incur any Indebtedness
that is subordinate or junior in right of payment in any
respect to any other Indebtedness, unless such Indebtedness
is expressly subordinate in right of payment to, or ranks
pari passu with, the Notes, in the case of the Company, or
the Note Guarantees, in the case of a Note Guarantor;
provided that the foregoing restriction shall not apply to
distinctions between categories of Senior Indebtedness or
Guarantor Senior Indebtedness that exist solely by reason of
Liens or Guarantees arising or created in respect of some
but not all such Senior Indebtedness or Guarantor Senior
Indebtedness, as the case may be.
Section 4.15. Limitation on the Sale or Issuance
of Preferred Stock of Restricted Subsidiaries. The Company
shall not sell, and shall not permit any Restricted
Subsidiary to, directly or indirectly, issue or sell, any
shares of Preferred Stock of any Restricted Subsidiary
except (i) to the Company or a Restricted Subsidiary, or to
directors as director's qualifying shares to the extent
required by applicable law, or (ii) if, immediately after
giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted
Subsidiary. The proceeds of any sale of such Preferred
Stock permitted by the preceding clause (ii) will be treated
as Net Cash Proceeds from an Asset Sale and must be applied
in accordance with the terms of Section 4.18.
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Section 4.16. Limitation on Dividend and Other
Payment Restrictions Affecting Restricted Subsidiaries.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create,
incur, assume or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i) pay, directly or
indirectly, dividends, in cash or otherwise, or make any
other distribution on or in respect of its Capital Stock or
any other interest or participation in, or measured by, its
profits, (ii) pay any Indebtedness owed to the Company or
any other Restricted Subsidiary, (iii) make loans or
advances to the Company or any other Restricted Subsidiary,
(iv) transfer any of its properties or assets to the Company
or any other Restricted Subsidiary (other than any customary
restriction on transfers of property subject to a Lien
permitted under this Indenture that would not adversely
affect the Company's ability to satisfy its obligations
hereunder) or (v) Guarantee any Indebtedness of the Company
or any other Restricted Subsidiary, except for such
encumbrances or restrictions existing under or by reason of
(a) applicable law, (b) customary non-assignment provisions
of any lease, license or other contract, (c) any agreement
or other instrument of a Person acquired by the Company or
any Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof),
which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so
acquired, (d) any existing agreement as in effect on the
Issue Date (to the extent of any encumbrances or
restrictions in existence thereunder on the Issue Date),
including the Credit Agreement as in effect on the Issue
Date, (e) any encumbrance or restriction with respect to a
Non-U.S. Restricted Subsidiary pursuant to an agreement
relating to Indebtedness of such Non-U.S. Restricted
Subsidiary permitted to be Incurred pursuant to clause (v),
(vi), (vii), (viii), (ix), (xi), (xii) or (xiii) of
Section 4.08(b), (f) arising or agreed to in the ordinary
course of business and that do not, individually or in the
aggregate, detract from the value of property or assets of
the Company or any Restricted Subsidiary, in each case in
any manner material to the Company or such Restricted
Subsidiary, (g) any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for
the sale or disposition of all or substantially all the
Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition, (h) any
restriction contained in security agreement or mortgage
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securing Indebtedness of any Restricted Subsidiary to the
extent such restriction restricts the transfer of the
property subject to such security agreement or mortgage,
(i) subordination provisions contained in any intercompany
note representing Indebtedness of the Company owing to and
held by any Restricted Subsidiary or Indebtedness of a Note
Guarantor owing to and held by the Company or any Restricted
Subsidiary, as contemplated by Section 4.08(b)(iv)(y), and
(j) any agreement that extends, refinances, renews or
replaces any agreement or other instrument described in
clause (c), (d) or (e) of this Section 4.16(a), which is not
more restrictive or less favorable to the Noteholders than
those existing under the agreement being extended,
refinanced, renewed or replaced.
(b) Without limiting the foregoing, the Company
shall not permit Swiss Subholding to, directly or
indirectly, create, incur, assume or otherwise cause or
suffer to exist or become effective any encumbrance or
restriction on the ability of Swiss Subholding to pay
dividends or make distributions, loans, advances or other
payments to the Company to enable the Company to pay
principal of the Notes at their final scheduled maturity (as
in effect on the Issue Date) and scheduled interest on the
Notes, pursuant to the terms of the Credit Agreement or any
other agreement or instrument, except for such encumbrances
or restrictions permitted pursuant to clause (a), (c), (g),
(i) or (j) of the foregoing paragraph (a) (it being
understood that the Credit Agreement will be permitted to
prohibit any redemption, repayment or acquisition of the
Notes prior to final scheduled maturity).
Section 4.17. Restriction on Transfer of Assets
to Subsidiaries. The Company shall not, and shall not
permit any Restricted Subsidiary that is a Note Guarantor
to, sell, convey, transfer or otherwise dispose of its
assets or property to any U.S. Restricted Subsidiary, except
for any disposition (a) made in the ordinary course of
business (including intercompany loans and cash equity
contributions), (b) that, after giving effect thereto, does
not cause the existence of a U.S. Significant Subsidiary or
(c) made to such U.S. Restricted Subsidiary if such U.S.
Restricted Subsidiary prior to or simultaneously with such
disposition executes and delivers a supplemental indenture
to this Indenture providing for a Note Guarantee by such
Restricted Subsidiary on substantially the same terms as set
forth in Article Ten of this Indenture with respect to the
Note Guarantee of Holding, which Note Guarantee shall be
subordinated to any Guarantee of such Restricted Subsidiary
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of Senior Indebtedness of the Company and shall be
subordinated to any other Indebtedness of such Restricted
Subsidiary (that is not subordinated or junior in right of
payment to any other Indebtedness of such Restricted
Subsidiary), in each case to the same extent as the Notes
are subordinated to the Senior Indebtedness of the Company
under this Indenture.
Section 4.18. Limitation on Disposition of
Proceeds of Asset Sales. (a) The Company shall not, and
shall not permit any Restricted Subsidiary to, engage in any
Asset Sale unless (i) such Asset Sale is for not less than
the Fair Market Value of the assets sold (as determined, to
the extent such Asset Sale involves a Fair Market Value
greater than $5,000,000, in good faith by the Board of
Directors whose determination shall be conclusive and
evidenced by a Board Resolution) and (ii) at least 75% of
the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or Cash
Equivalents (with Indebtedness of the Company or any
Restricted Subsidiary being counted as cash for such purpose
if the Company and each Restricted Subsidiary, as the case
may be, is unconditionally released from liability
therefor). Net Cash Proceeds of any Asset Sale may be
applied to repay Specified Senior Indebtedness (but only if
the related loan commitments (if any) or amounts available
to be reborrowed (if any) under such Specified Senior
Indebtedness are permanently reduced by the amount of such
payment). To the extent that such Net Cash Proceeds are not
applied as provided in the preceding sentence, the Company
or a Restricted Subsidiary, as the case may be, may apply
the Net Cash Proceeds from such Asset Sale, within 360 days
of such Asset Sale, to an investment in properties and
assets to replace the properties and assets that were the
subject of such Asset Sale or in properties and assets that
will be used in the businesses of the Company or its
Restricted Subsidiaries, as the case may be, existing on the
Issue Date or in businesses reasonably related thereto. Any
Net Cash Proceeds from any Asset Sale not applied as
provided in the preceding two sentences, within 360 days of
such Asset Sale, constitute "Excess Proceeds" subject to
disposition as provided below.
(b) When the aggregate amount of Excess Proceeds
exceeds $15,000,000, the Company shall make an offer to
purchase (an "Excess Proceeds Offer") from all Noteholders
and, to the extent required by the terms thereof, from the
holders of Pari Passu Indebtedness of the Company, an
aggregate principal amount of Notes and any such Pari Passu
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Indebtedness equal to such Excess Proceeds, at a purchase
price (the "Excess Proceeds Offer Price") in cash equal to
100% of the outstanding principal amount thereof (or
accreted value, as applicable), plus accrued and unpaid
interest, if any, to the purchase date in respect of the
Excess Proceeds Offer in accordance with the procedures set
forth in this Section 4.18 or the agreements governing any
such Pari Passu Indebtedness. To the extent that the
aggregate principal amount of Notes and any such Pari Passu
Indebtedness tendered pursuant to an Excess Proceeds Offer
is less than the Excess Proceeds, the Company may use such
deficiency for general corporate purposes. If the aggregate
principal amount of Notes and any such Pari Passu Indebted-
ness validly tendered and not withdrawn exceeds the Excess
Proceeds, the portion of the Excess Proceeds (x) payable in
respect of the Notes shall be an amount (the "Note Amount")
equal to the Excess Proceeds multiplied by a fraction, the
numerator of which is the outstanding principal amount of
the Notes, and the denominator of which is the sum of the
outstanding principal amount of the Notes and the outstand-
ing principal amount (or accreted value, as applicable) of
any such Pari Passu Indebtedness (less the amount, if any,
by which such product exceeds the principal amount of Notes
validly tendered and not withdrawn) and (y) payable in
respect of any such Pari Passu Indebtedness shall be an
amount equal to the excess of the Excess Proceeds over the
Note Amount. Upon completion of such Excess Proceeds Offer,
the amount of Excess Proceeds shall be reset to zero.
(c) (1) Within 15 Business Days after the Company
becomes obligated to make an Excess Proceeds Offer, the
Company shall deliver to the Trustee and send, by first-
class mail to each Holder, a written notice stating that the
Holder may elect to have his Notes purchased by the Company
either in whole or in part (subject to prorating as
hereinafter described in the event the Excess Proceeds Offer
is oversubscribed) in integral multiples of $1,000 of
principal amount, at the applicable purchase price. The
notice shall specify a purchase date not less than 30 days
nor more than 60 days after the date of such notice, or such
later date as may be necessary for the Company to comply
with the requirements under the Exchange Act (an "Excess
Proceeds Purchase Date"), and shall contain such information
concerning the business of the Company which the Company in
good faith believes will enable such Holders to make an
informed decision (which at a minimum shall include (i) the
most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company,
the most recent subsequently filed Quarterly Report on Form
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10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, other than Current
Reports describing Asset Sales otherwise described in the
offering materials (or corresponding successor reports),
(ii) a description of material developments in the Company's
business subsequent to the date of the latest of such
reports, and (iii) if material, appropriate pro forma
financial information and all instructions and materials
necessary to tender Notes pursuant to the Excess Proceeds
Offer, together with the information contained in clause
(3).
(2) Not later than the date upon which written
notice of an Excess Proceeds Offer is delivered to the
Trustee as provided below, the Company shall deliver to the
Trustee an Officers' Certificate as to (i) the amount of the
aggregate Excess Proceeds Offer Price for the Notes,
(ii) the allocation of the Net Cash Proceeds from the Asset
Sales pursuant to which such Excess Proceeds Offer is being
made and (iii) the compliance of such allocation with the
provisions of Section 4.18(a). On or prior to the Excess
Proceeds Purchase Date, the Company shall also irrevocably
deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own paying agent, segregate and
hold in trust) in Cash Equivalents an amount equal to the
aggregate Excess Proceeds Offer Price for the Notes to be
held for payment in accordance with the provisions of this
Section 4.18. Upon the expiration of the period for which
the Excess Proceeds Offer remains open (the "Offer Period"),
the Company shall deliver to the Trustee for cancellation
the Notes or portions thereof which have been properly
tendered to and are to be accepted by the Company. The
Trustee shall, on the Excess Proceeds Purchase Date, mail or
deliver payment to each tendering Holder in the amount of
the purchase price. In the event that the aggregate
purchase price of the Notes delivered by the Company to the
Trustee is less than the aggregate Excess Proceeds Offer
Price for the Notes, the Trustee shall deliver the excess to
the Company immediately after the expiration of the Offer
Period for application in accordance with this Section 4.18.
(3) Holders electing to have a Note purchased
will be required to surrender the Note with an appropriate
form duly completed, to the Company at the address specified
in the notice at least three Business Days prior to the
Excess Proceeds Purchase Date. Holders will be entitled to
withdraw their election to have a Note purchased pursuant to
this Section 4.18 if the Trustee or the Company receives not
later than one Business Day prior to the Excess Proceeds
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Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal
amount of the Note which was delivered for purchase by the
Holder, the certificate number of the Note in respect of
which such notice of withdrawal is being submitted and a
statement that such Holder is withdrawing his election to
have such Note purchased. If at the expiration of the Offer
Period the aggregate principal amount of Notes surrendered
by Holders exceeds the aggregate Excess Proceeds Offer Price
for the Notes, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may
be deemed appropriate by the Company so that only Notes in
denominations of $1,000, or integral multiples thereof,
shall be purchased). Holders whose Notes are purchased only
in part will be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered.
(4) At the time the Company delivers Notes to the
Trustee which are to be accepted for purchase, the Company
shall also deliver an Officers' Certificate stating the such
Notes are to be accepted by the Company pursuant to and in
accordance with the terms of this Section 4.18. A Note
shall be deemed to have been accepted for purchase at the
time the Trustee, directly or through an agent, mails or
delivers payment therefor to the surrendering Holder.
(d) The Company shall comply, to the extent
applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes pursuant to this
covenant. To the extent that the provisions of any
securities laws or regulations conflict with provisions of
this covenant, the Company shall comply with the applicable
securities laws and regulations and will not be deemed to
have breached its obligations under this paragraph by virtue
thereof.
Section 4.19. Change of Control. (a) Upon the
occurrence of a Change of Control, each Noteholder shall
have the right to require the Company to repurchase all or
any part of such Holder's Notes at a purchase price in cash
equal to 101% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest
payment date), in accordance with the terms contemplated in
this covenant.
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(b) A "Change of Control" means the occurrence of
any of the following events:
(i) prior to an initial Public Equity Offering,
the Permitted Holder ceases to be the beneficial owner
(as defined in Rules 13d-3 and 13d-5 under the Exchange
Act), directly or indirectly, of Voting Stock of each
of the Company and Holding representing more than 50%
of the total voting power of the Voting Stock of each
of the Company and Holding (as a result of the
acquisition or issuance of securities, by merger or
otherwise);
(ii) at any time after an initial Public Equity
Offering, any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Permitted Holder, is or becomes (as the
result of the acquisition or issuance of securities, by
merger or otherwise) the Beneficial Owner, directly or
indirectly, of (A) more than 50% of the common stock of
the Company or Holding or (B) more than 50% of the
total voting power of the Voting Stock of the Company
or Holding;
(iii) the merger or consolidation of the Company
or Holding with or into another Person, or of another
Person with or into the Company or Holding, or the
sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all the assets of
the Company or Holding to another Person, and, in the
case of any such merger or consolidation, the
securities of the Company or Holding, as the case may
be, that are outstanding immediately prior to such
transaction and that represent 100% of the aggregate
voting power of the Voting Stock of the Company or
Holding, as the case may be, are changed into or
exchanged for cash, securities or property, unless
(x) pursuant to such transaction such securities are
changed into or exchanged for (A) Voting Stock (other
than Redeemable Capital Stock) of the surviving or
transferee corporation or (B) cash, securities and
other property in an amount that could be paid by the
Company as a Restricted Payment under this Indenture,
and (y) immediately after giving effect to such
transaction, no "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Permitted Holder, is or becomes (as the
result of the acquisition or issuance of securities, by
merger or otherwise) the Beneficial Owner, directly or
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indirectly, of more than 50% of the total voting power
of the Voting Stock of the surviving or transferee
corporation;
(iv) during any consecutive two-year period,
individuals who at the beginning of such period
constituted the Board of Directors of the Company or
Holding (together with any new directors whose election
by such Board of Directors or whose nomination for
election by the shareholders of the Company or Holding,
as the case may be, was approved by a vote of 66 2/3%
of the directors then still in office who were either
directors at the beginning of such period or whose
election as directors or nomination for election was
previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the
Company or Holding, as the case may be, then in office;
or
(v) the approval by stockholders of the Company
of any plan or proposal for the liquidation or
dissolution of the Company, or any final order,
judgment or decree of a court of competent jurisdiction
shall be entered against the Company decreeing the
dissolution or liquidation of the Company.
(c) Prior to the mailing of the notice to Holders
provided for in paragraph (d) below, the Company shall have
(x) terminated all commitments and repaid in full all
Indebtedness under the Credit Agreement and all other Credit
Agreement Obligations then due and owing, or (y) obtained
the requisite consents under the Credit Agreement to permit
the purchase of the Notes as provided for under this
covenant. If a notice has been mailed when such condition
precedent has not been satisfied, the Company shall have no
obligation to (and shall not) effect the purchase of Notes
until such time as such condition precedent is satisfied.
Failure to mail the notice on the date specified below or to
have satisfied the foregoing condition precedent by the date
that the notice is required to be mailed shall in any event
constitute a covenant default under Section 6.01(iv).
(d) Within 30 days following any Change of
Control (or at the Company's option, prior to such Change of
Control, in anticipation of such Change of Control), the
Company shall send by first class mail a written notice to
each Holder at its registered address with a copy to the
Trustee stating: (1) that a Change of Control has occurred
(or will occur) and that such Holder has the right to
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require the Company to purchase such Holder's Notes at a
purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to date
of repurchase (subject to the right of Holders of record on
a record date to receive interest on the relevant interest
payment date); (2) the circumstances and relevant facts and
financial information regarding such Change of Control;
(3) the repurchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is
mailed); (4) the instructions determined by the Company,
consistent with this covenant, that a Holder must follow in
order to have its Notes purchased; and (5) that, if such
offer is made prior to such Change of Control, payment is
conditioned on the occurrence of such Change of Control.
(e) Holders electing to have a Note purchased
will be required to surrender the Note, with an appropriate
form duly completed, to the Company at the address specified
in the notice at least three Business Days prior to the
repurchase date. Holders will be entitled to withdraw their
election if the Trustee or the Company receives not later
than two Business Days prior to the purchase date, a
telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the
Note which was delivered for purchase by the Holder, the
certificate number of the Note in respect of which such
notice of withdrawal is being submitted and a statement that
such Holder is withdrawing his election to have such Notes
purchased.
(f) On the purchase date, all Notes purchased by
the Company under this Section shall be delivered by the
Trustee for cancellation, and the Company shall pay the
purchase price accrued and unpaid interest, if any, to the
Holders entitled thereto.
(g) The Company shall comply, to the extent
applicable, with the requirements of Section 14(e) under the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes pursuant to this
covenant. To the extent that the provisions of any
securities laws or regulations conflict with provisions of
this covenant, the Company shall comply with the applicable
securities laws and regulations and will not be deemed to
have breached its obligations under this paragraph by virtue
thereof.
Section 4.20. Reporting Requirements.
Notwithstanding that the Company may not be required to
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remain subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, to the extent permitted by the
Exchange Act or the interpretations of the SEC in respect
thereof, the Company shall file with the SEC and provide,
within five days after the Company is required to file the
same with the SEC, to the Trustee the annual reports and the
information, documents and other reports that are specified
in Sections 13 and 15(d) of the Exchange Act. In the event
that the Company is not permitted to file such reports,
documents and information with the SEC, the Company shall
provide substantially similar information to the Trustee,
Noteholders and prospective Noteholders (upon reasonable
request) as if the Company were subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act.
The Company also will comply with the other provisions of
TIA Section 314(a).
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. Merger, Consolidation and Sale of
Assets. (a) The Company shall not, in any transaction or
series of related transactions, merge or consolidate with or
into, or sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and
assets to, any Person or Persons, and the Company shall not
permit any Restricted Subsidiary to enter into any such
transaction or series of transactions if such transaction or
series of transactions, in the aggregate, would result in a
sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of the properties
and assets of the Company or of the Company and its
Subsidiaries on a consolidated basis to any other Person or
Persons, unless at the time of and immediately after giving
effect thereto (i) either (A) if the transaction or
transactions is a merger or consolidation, the Company shall
be the surviving Person of such merger or consolidation, or
(B) the Person formed by such consolidation or into which
the Company or such Restricted Subsidiary is merged or to
which the properties and assets of the Company or such
Restricted Subsidiary, as the case may be, substantially as
an entirety, are sold, assigned, transferred, leased or
otherwise disposed of (any such surviving Person or
transferee Person being the "Surviving Entity") shall be a
corporation organized and existing under the laws of the
United States of America, any State thereof or the District
of Columbia and shall expressly assume by a supplemental
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indenture executed and delivered to the Trustee, in form and
substance satisfactory to the Trustee, all the obligations
of the Company under the Notes and this Indenture, and in
each case, this Indenture shall remain in full force and
effect; and (ii) immediately after giving effect to such
transaction or series of related transactions on a pro forma
basis (including, without limitation, any Indebtedness
Incurred or anticipated to be Incurred in connection with or
in respect of such transaction or series of transactions),
(x) no Default or Event of Default shall have occurred and
be continuing and (y) the Company or the Surviving Entity,
as the case may be, could Incur $1.00 of additional
Indebtedness pursuant to Section 4.08(a); provided that this
Section 5.01(a) shall not apply to or restrict the Merger.
In connection with any consolidation, merger,
sale, assignment, conveyance, transfer, lease or other
disposition contemplated hereby, the Company shall deliver,
or cause to be delivered, to the Trustee, in form and
substance satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition and the supplemental
indenture in respect thereof comply with the requirements
under this Indenture. In addition, each Note Guarantor,
unless it is the other party to the transaction or unless
its Note Guarantee will be released and discharged in
accordance with its terms as a result of the transaction,
will be required to confirm, by supplemental indenture, that
its Note Guarantee will apply to the obligations of the
Company or the Surviving Entity under this Indenture.
(b) The Company agrees, as soon as possible, to
cause the Merger to be consummated and the First
Supplemental Indenture to be executed. Concurrently with
the execution and delivery of the First Supplemental
Indenture, the Company shall deliver to the Trustee an
Opinion of Counsel in form and substance satisfactory to the
Trustee stating that such supplemental indenture has been
duly authorized, executed and delivered by Mettler-Toledo,
Inc. and Holding and that, subject to the applicable
bankruptcy, insolvency, fraudulent transfer, fraudulent
conveyance, reorganization, moratorium and other laws now or
hereafter in effect affecting creditors' rights generally
and the general principles of equity (including, without
limitation, standards of materiality, good faith, fair
dealing and reasonableness), such supplemental indenture is
a valid and legally binding agreement of Mettler-Toledo,
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Inc. and Holding, enforceable against such parties in
accordance with its terms.
Section 5.02. Successor Substituted. Upon any
consolidation or merger or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all
of the assets of the Company in accordance with Section 5.01
in which the Company is not the continuing obligor under
this Indenture, the Surviving Entity shall succeed to, and
be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as
if such successor had been named as the Company herein, and
thereafter the predecessor Person shall be relieved of all
obligations under this Indenture and the Notes, except that
the predecessor Person in the case of a transfer by lease
will not be released from the obligation to pay the
principal of, premium, if any, and interest on the Notes.
For all purposes of this Indenture and the Notes
(including the provision of this Section 5.02 and
Sections 4.08, 4.09 and 4.11), Subsidiaries of any Surviving
Entity shall, upon such transaction or series of related
transactions, become Restricted Subsidiaries or Unrestricted
Subsidiaries as provided pursuant to the definition of
"Unrestricted Subsidiary" set forth in Section 1.01, and all
Indebtedness, and all Liens on property or assets, of the
Surviving Entity and its Subsidiaries (other than
Indebtedness, and Liens on property or assets, of the
Company and its Restricted Subsidiaries outstanding
immediately prior to such transaction or series of related
transactions) shall be deemed to have been Incurred upon
such transaction or series of related transactions.
ARTICLE SIX
REMEDIES
Section 6.01. Events of Default. An "Event of
Default" means any of the following events:
(i) default in the payment of principal of, or
premium, if any, when due and payable, on any of the
Notes (at its Stated Maturity, upon optional
redemption, required repurchase, or otherwise); or
(ii) default in any payment of an installment of
interest on any of the Notes when due and payable, for
30 days; or
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(iii) failure to perform or comply with
Section 5.01; or failure to offer to repurchase or to
repurchase the Notes in the Event of a Change of
Control in accordance with Section 4.19; or
(iv) the Company or any Note Guarantor shall fail
to perform or observe any other term, covenant or
agreement contained in the Notes, any Note Guarantee or
this Indenture (other than a Default specified in
clause (i), (ii) or (iii) of this Section 6.01) for a
period of 30 days after written notice of such failure
requiring the Company to remedy the same shall have
been given (x) to the Company by the Trustee or (y) to
the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the Notes then
outstanding; or
(v) default or defaults under one or more
mortgages, bonds, debentures or other evidences of
Indebtedness under which the Company or any Restricted
Subsidiary then has outstanding Indebtedness in excess
of $15,000,000, individually or in the aggregate, and
either (a) such a principal amount of such Indebtedness
is already due and payable in full or (b) such default
or defaults have resulted in the acceleration of the
maturity of such Indebtedness; or
(vi) one or more judgments, orders or decrees of
any court or regulatory or administrative agency of
competent jurisdiction for the payment of money in
excess of $15,000,000, either individually or in the
aggregate, shall be entered against the Company, any
Note Guarantor or any Significant Restricted Subsidiary
or any of their respective properties and shall not be
discharged or fully bonded and either (a) any creditor
shall have commenced an enforcement proceeding upon
such judgment, order or decree or (b) there shall have
been a period of 60 days after the date on which any
period for appeal has expired and during which a stay
of enforcement of such judgment, order or decree shall
not be in effect; or
(vii) (A) any holder of at least $15,000,000 in
aggregate principal amount of Indebtedness of the
Company or any Restricted Subsidiary as to which a
default has occurred and is continuing shall commence
judicial proceedings (which proceedings shall remain
unstayed for 5 Business Days) to foreclose upon assets
of the Company or any Restricted Subsidiary having an
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aggregate Fair Market Value, individually or in the
aggregate, in excess of $15,000,000 or shall have
exercised any right under applicable law or applicable
security documents to take ownership of any such assets
in lieu of foreclosure or (B) any action described in
the foregoing clause (A) shall result in any court of
competent jurisdiction issuing any order for the
seizure of such assets; or
(viii) any Note Guarantee of a Significant Note
Guarantor ceases to be in full force and effect or is
declared null and void or any Note Guarantor denies
that it has any further liability under any Note
Guarantee, or gives notice to such effect (other than
by reason of the termination of this Indenture or the
release of any such Note Guarantee in accordance with
this Indenture); or
(ix) there shall have been the entry by a court
of competent jurisdiction of (a) a decree or order for
relief in respect of the Company, any Significant Note
Guarantor or any Significant Restricted Subsidiary in
an involuntary case or proceeding under any applicable
Bankruptcy Law or (b) a decree or order adjudging the
Company, any Significant Note Guarantor or any
Significant Restricted Subsidiary bankrupt or
insolvent, or seeking reorganization, arrangement,
adjustment or composition of or in respect of the
Company, any Significant Note Guarantor or any
Significant Restricted Subsidiary under any applicable
federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company, any
Significant Note Guarantor or any Significant
Restricted Subsidiary or of any substantial part of
their respective properties, or ordering the winding up
or liquidation of their affairs, and any such decree or
order for relief shall continue to be in effect, or any
such other decree or order shall be unstayed and in
effect, for a period of 60 consecutive days; or
(x) (a) the Company, any Significant Note
Guarantor or any Significant Restricted Subsidiary
commences a voluntary case or proceeding under any
applicable Bankruptcy Law or any other case or
proceeding to be adjudicated bankrupt or insolvent, (b)
the Company, any Significant Note Guarantor or any
Significant Restricted Subsidiary consents to the entry
of a decree or order for relief in respect of the
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Company, any Significant Note Guarantor or such
Significant Restricted Subsidiary in an involuntary
case or proceeding under any applicable Bankruptcy Law
or to the commencement of any bankruptcy or insolvency
case or proceeding against it, (c) the Company, any
Significant Note Guarantor or any Significant
Restricted Subsidiary files a petition or answer or
consent seeking reorganization or relief under any
applicable federal or state law, (d) the Company, any
Significant Note Guarantor or any Significant
Restricted Subsidiary (1) consents to the filing of
such petition or the appointment of, or taking
possession by, a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of
the Company, any Significant Note Guarantor or such
Significant Restricted Subsidiary or of any substantial
part of their respective properties, (2) makes an
assignment for the benefit of creditors or (3) admits
in writing its inability to pay its debts generally as
they become due, or (e) the Company, any Significant
Note Guarantor or any Significant Restricted Subsidiary
takes any corporate action in furtherance of any such
actions in this paragraph (x).
Section 6.02. Acceleration. If an Event of
Default (other than an Event of Default specified in
Section 6.01(ix) or (x) with respect to the Company) occurs
and is continuing, the Trustee, by notice to the Company, or
the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding, by notice to the Trustee and the
Company, may declare the principal of, premium, if any, and
accrued interest on all the Notes due and payable immedi-
ately, upon which declaration all amounts payable in respect
of the Notes shall immediately be due and payable; provided
that so long as the Credit Agreement shall be in full force
and effect, if an Event of Default shall have occurred and
be continuing (other than an Event of Default specified in
Section 6.01(ix) or (x) with respect to the Company), any
such acceleration shall not be effective until the earlier
to occur of (x) five Business Days following delivery of a
written notice of such acceleration of the Notes to the Bank
Agent under the Credit Agreement and (y) the acceleration of
any Indebtedness under the Credit Agreement. If an Event of
Default specified in Section 6.01(ix) or (x) with respect to
the Company occurs and is continuing, then the principal of,
premium, if any, and interest on all the Notes shall ipso
facto become and be immediately due and payable without any
declaration or other act on the part of the Trustees or any
Holder.
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Notwithstanding the foregoing, in the event of a
declaration of acceleration in respect of the Notes because
(x) an Event of Default specified in Section 6.01(v) shall
have occurred and be continuing, such declaration of
acceleration of the Notes and such Event of Default shall be
automatically annulled and rescinded and be of no further
effect if the Indebtedness that is the subject of such Event
of Default has been discharged or paid in full or such Event
of Default shall have been cured or waived by the holders of
such Indebtedness and if such Indebtedness has been
accelerated, then the holders thereof have rescinded their
declaration of acceleration in respect of such Indebtedness
or (y) an Event of Default specified in Section 6.01(vii)
shall have occurred and be continuing, such declaration of
acceleration of the Notes and such Event of Default shall be
automatically annulled and rescinded and be of no further
effect if the proceedings or enforcement action with respect
to the Indebtedness that is the subject of such Event of
Default is terminated or rescinded, or such Indebtedness is
paid in full and only so long as any holder of such
Indebtedness shall not have applied any assets referenced in
Section 6.01(vii) in satisfaction of such Indebtedness and,
in the case of both (x) and (y) of this paragraph, written
notice of such discharge, cure or waiver and rescission, as
the case may be, shall have been given to the Trustee within
60 days after such declaration of acceleration in respect of
the Notes by the Company or by the requisite holders of such
Indebtedness or a trustee, fiduciary or agent for such
holders or other evidence satisfactory to the Trustee of
such events is provided to the Trustee and no other Event of
Default shall have occurred which has not been cured or
waived during such 60-day period.
After a declaration of acceleration under this
Indenture, but before a judgment or decree for payment of
money due has been obtained by the Trustee, the Holders of a
majority in aggregate principal amount of the outstanding
Notes, by written notice to the Company and the Trustee, may
rescind such declaration if:
(a) the Company has paid or deposited with the
Trustee a sum sufficient to pay:
(i) all sums paid or advanced by the
Trustee under this Indenture and the reasonable
compensation, expenses, disbursements, and
advances of the Trustee, its agents and counsel,
(ii) all overdue interest on all Notes,
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(iii) the principal of, and premium, if any,
on any Notes which have become due otherwise than
by such declaration of acceleration and interest
thereon at the rate borne by the Notes, and
(iv) to the extent that payment of such
interest is lawful, interest upon overdue interest
at the rate borne by the Notes which has become
due otherwise than by such declaration of
acceleration;
(b) the rescission would not conflict with any
judgment or decree of a court of competent
jurisdiction; and
(c) all Events of Default, other than the
non-payment of principal of, premium, if any, and
interest on the Notes that has become due solely by
such declaration of acceleration, have been cured or
waived.
No such rescission shall affect any subsequent
Default or Event of Default or impair any right consequent
thereon.
Section 6.03. Other Remedies. If an Event of
Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to col-
lect the payment of principal of, premium, if any, or
interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
All rights of action and claims under this Inden-
ture or the Notes may be enforced by the Trustee even if it
does not possess any of the Notes or does not produce any of
them in the proceeding. A delay or omission by the Trustee
or any Noteholder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent
permitted by law.
Section 6.04. Waiver of Past Defaults. The
Holders of not less than a majority in aggregate principal
amount of the outstanding Notes by notice to the Trustee
may, on behalf of the Holders of all the Notes, waive any
past Defaults and their consequences, except a Default or
Event of Default specified in Section 6.01(i) or (ii) or in
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respect of any covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of
each Note outstanding. When a Default or Event of Default
is so waived, it shall be deemed cured and shall cease to
exist.
Section 6.05. Control by Majority. The Holders
of at least a majority in aggregate principal amount of the
outstanding Notes shall have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred on the Trustee; provided that the Trustee may
refuse to follow any direction (a) that conflicts with any
rule of law or this Indenture, (b) that the Trustee deter-
mines may be unduly prejudicial to the rights of another
Noteholder, or (c) that may expose the Trustee to personal
liability unless the Trustee has indemnification satis-
factory to it in its sole discretion against any loss or
expense caused by its following such direction; and pro-
vided, further, that the Trustee may take any other action
deemed proper by the Trustee that is not inconsistent with
such direction.
Section 6.06. Limitation on Suits. No Holder of
any Notes shall have any right to institute any proceeding
with respect to this Indenture or any remedy thereunder,
unless:
(a) the Holder gives written notice to the
Trustee of a continuing Event of Default;
(b) the Holders of at least 25% in aggregate
principal amount of the outstanding Notes make a writ-
ten request to the Trustee to pursue the remedy within
30 days of the receipt of such notice;
(c) such Holder or Holders offer and, if
requested, provide to the Trustee reasonable indemnity,
satisfactory to the Trustee against any loss, liability
or expense, to institute such proceeding as Trustee
under the Notes and this Indenture;
(d) the Trustee does not comply with the request
within 30 days after receipt of the notice and, if
requested, provision of indemnity; and
(e) during such 30-day period the Holders of a
majority in aggregate principal amount of the out-
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standing Notes do not give the Trustee a direction
which is inconsistent with the request.
The foregoing limitations shall not apply to a
suit instituted by a Holder for the enforcement of the
payment of the principal of, premium, if any, or interest
on, such Note held by such Holder on or after the respective
due dates set forth in such Note.
Section 6.07. Right of Holders to Receive Pay-
ment. Notwithstanding any other provision in this Inden-
ture, the right of any Holder of Notes to receive payment of
the principal of and interest on such Note, on or after the
respective Stated Maturities expressed in such Note, or to
bring suit for the enforcement of any such payment on or
after the respective Stated Maturities, is absolute and
unconditional and shall not be impaired or affected without
the consent of the Holder.
Section 6.08. Collection Suit by Trustee. If an
Event of Default specified in clause (i) or (ii) of Section
6.01 occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust
against the Company, any Note Guarantor or any other obligor
on the Notes for the whole amount of principal of and
accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such
interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum borne by the
Notes and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claims.
The Trustee may file such proofs of claim and other papers
or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the
Holders allowed in any judicial proceedings relative to the
Company or any Note Guarantor (or any other obligor upon the
Notes), their creditors or their property and shall be
entitled and empowered to collect and receive any monies or
other property payable or deliverable on any such claims and
to distribute the same, and any Custodian in any such
judicial proceedings is hereby authorized by each Holder to
make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments
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directly to the Holders, to pay to the Trustee any amount
due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section
7.08. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrange-
ment, adjustment or composition affecting the Notes or the
rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10. Priorities. If the Trustee col-
lects any money pursuant to this Article Six, it shall pay
out such money in the following order:
First: to the Trustee for amounts due under
Section 7.08;
Second: subject to Article Eleven, to Holders for
interest accrued on the Notes, ratably, without pref-
erence or priority of any kind, according to the
amounts due and payable on the Notes for interest;
Third: subject to Article Eleven, to Holders for
principal amounts owing under the Notes, ratably,
without preference or priority of any kind, according
to the amounts due and payable on the Notes for prin-
cipal; and
Fourth: the balance, if any, to the Company or,
to the extent the Trustee collects any amount from any
Note Guarantor, to such Note Guarantor.
The Trustee, upon prior written notice to the
Company, may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs. In any suit
for the enforcement of any right or remedy under this Inden-
ture or in any suit against the Trustee for any action taken
or omitted by it as Trustee, a court may in its discretion
require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in
its discretion may assess reasonable costs, including rea-
sonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section
6.11 does not apply to any suit by the Trustee, any suit by
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a Holder pursuant to Section 6.07, or a suit by Holders of
more than 10% in aggregate principal amount of the out-
standing Notes.
Section 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding
to enforce any right or remedy under this Indenture, any
Note or any Note Guarantee and such proceeding has been dis-
continued or abandoned for any reason, or has been deter-
mined adversely to the Trustee or to such Holder, then and
in every such case the Company, each Note Guarantor, the
Trustee and the Holders shall, subject to any determination
in such proceeding, be restored severally and respectively
to their former positions hereunder, and thereafter all
rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties. (a) In case an Event of
Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this
Indenture, and shall use the same degree of care and skill
in their exercise, as a prudent Person would exercise or use
under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of
Default,
(1) the Trustee need perform only such duties as
are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the require-
ments of this Indenture; but in the case of any such
certificates or opinions which by provision hereof are
specifically required to be furnished to the Trustee,
the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the
requirements of this Indenture.
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(c) No provision of this Indenture shall be
construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(2) the Trustee shall not be liable for any error
of judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect
to any action it takes or omits to take in good faith
in accordance with a direction received by it pursuant
to Section 6.05.
(d) No provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights
or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest
on any assets received by it except as the Trustee may agree
with the Company. Assets held in trust by the Trustee need
not be segregated from other assets except to the extent
required by law.
Section 7.02. Rights of Trustee. Subject to
Section 7.01 hereof and the provisions of TIA Section 315:
(a) The Trustee may rely on any document believed
by it to be genuine and to have been signed or pre-
sented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from
acting, it may consult with counsel and may require an
Officers' Certificate or an Opinion of Counsel, which
shall conform to Sections 12.04 and 12.05. The Trustee
shall not be liable for any action it takes or omits to
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take in good faith in reliance on such certificate or
opinion.
(c) The Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any
action taken or omitted by it in good faith and
believed by it to be authorized or within the dis-
cretion, rights or powers conferred upon it by this
Indenture other than any liabilities arising out of its
own willful misconduct or negligence.
(e) The Trustee may consult with counsel of its
own choosing and the advice or opinion of such counsel
as to matters of law shall be full and complete autho-
rization and protection in respect of any action taken,
omitted or suffered by it hereunder in good faith and
in accordance with the advice or opinion of such coun-
sel.
(f) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opin-
ion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit.
(g) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Indenture at the request, order or direction of
any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be
incurred therein or thereby.
Section 7.03. Individual Rights of Trustee. The
Trustee, any Paying Agent, Registrar or any other agent of
the Company, in its individual or any other capacity, may
become the owner or pledgee of Notes and, subject to Sec-
tions 7.11 and 7.12 and TIA Sections 310 and 311, may other-
wise deal with the Company and its Subsidiaries with the
same rights it would have if it were not the Trustee, Paying
Agent, Registrar or such other agent.
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Section 7.04. Trustee's Disclaimer. The Trustee
makes no representations as to the validity or sufficiency
of this Indenture, the Notes or of any Note Guarantee, it
shall not be accountable for the Company's use or
application of the proceeds from the Notes, it shall not be
responsible for the use or application of any money received
by any Paying Agent other than the Trustee and it shall not
be responsible for any statement in the Notes other than the
Trustee's certificate of authentication.
Section 7.05. Notice of Default. If a Default or
an Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Holder
notice of the Default or Event of Default within 30 days
after the occurrence thereof; provided that, except in the
case of a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on any Note, the
Trustee may withhold the notice to the Holders of such Notes
if a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests
of the Holders.
Section 7.06. Money Held in Trust. All moneys
received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which
they were received, but need not be segregated from other
funds except to the extent required herein or by law. The
Trustee shall not be under any liability for interest on any
moneys received by it hereunder.
Section 7.07. Reports by Trustee to Holders.
Within 60 days after each November 15 beginning with the
November 15 following the date of this Indenture, the
Trustee shall, to the extent that any of the events
described in TIA Section 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Holder a
brief report dated as of such November 15 that complies with
TIA Section 313(a). The Trustee also shall comply with TIA
Sections 313(b) and 313(c).
A copy of each report at the time of its mailing
to Holders shall be mailed to the Company and filed with the
SEC and each securities exchange, if any, on which the Notes
are listed.
The Company shall notify the Trustee in writing if
the Notes become listed on any securities exchange and of
any delisting thereof.
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Section 7.08. Compensation and Indemnity. The
Company covenants and agrees to pay the Trustee from time to
time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it,
including costs of collection. Such expenses shall include
the reasonable compensation, disbursements and expenses of
the Trustee's agents and counsel, accountants and experts.
The Company shall indemnify the Trustee for, and
hold it harmless against, any loss, liability, claim or
expense (including reasonable attorneys' fees and expenses)
incurred by it arising out of or in connection with the
administration of this trust and its rights or duties
hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the
acceptance, exercise or performance of any of its powers or
duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which
it may seek indemnity. Failure by the Trustee to so notify
the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company
need not reimburse any expense or indemnify against any loss
or liability to the extent incurred by the Trustee through
its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in
this Section 7.08, the Trustee shall have a Lien prior to
the Notes on all assets held or collected by the Trustee, in
its capacity as Trustee, except assets held in trust to pay
principal of, premium, if any, or interest on particular
Notes.
When the Trustee incurs expenses or renders ser-
vices in connection with an Event of Default specified in
Section 6.01(ix) or (x), the expenses and the compensation
for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.08
and any Lien arising hereunder shall survive the resignation
or removal of any trustee, the discharge of the Company's
obligations pursuant to Article Eight and/or the termination
of this Indenture.
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Section 7.09. Replacement of Trustee. The
Trustee may resign by so notifying the Company. The Holders
of a majority in principal amount of the outstanding Notes
may remove the Trustee by so notifying the Company and the
Trustee and may appoint a successor trustee with the
Company's consent. The Company shall remove the Trustee if:
(a) the Trustee fails to comply with Section
7.11;
(b) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with
respect to the Trustee under any Bankruptcy Law;
(c) a receiver or other public officer takes
charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a
vacancy exists in the office of Trustee for any reason, the
Company shall notify each Holder of such event and shall
promptly appoint a successor Trustee. The Trustee shall be
entitled to payment of its fees and reimbursement of its
expenses while acting as Trustee, and to the extent such
amounts remain unpaid, the Trustee that has resigned or has
been removed shall retain the Lien afforded by Section 7.08.
Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the
outstanding Notes may appoint a successor Trustee to replace
the successor Trustee appointed by the Company. No retiring
Trustee shall have any obligation to provide to any
successor Trustee any form of indemnity or other financial
assurances concerning the fees and expenses of the successor
Trustee.
A successor Trustee shall deliver a written accep-
tance of its appointment to the retiring Trustee and to the
Company. Immediately after that, the retiring Trustee shall
transfer all property held by it as Trustee to the successor
Trustee, subject to the Lien provided in Section 7.08, the
resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Inden-
ture. A successor Trustee shall mail notice of its suc-
cession to each Noteholder.
If a successor Trustee does not take office within
60 days after the retiring Trustee resigns or is removed,
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the retiring Trustee, the Company or the Holders of at least
10% in principal amount of the outstanding Notes may peti-
tion any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.11,
any Holder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a
successor Trustee.
Notwithstanding replacement of the Trustee pur
suant to this Section 7.09, the Company's obligations under
Section 7.08 shall continue for the benefit of the retiring
Trustee.
Section 7.10. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into,
or transfers all or substantially all of its corporate trust
business or assets to, another corporation or national
banking association, the resulting, surviving or transferee
corporation or national banking association without any
further act shall, if such resulting, surviving or
transferee corporation or national banking association is
otherwise eligible hereunder, be the successor Trustee.
In case at the time such successor or successors
by consolidation, merger, conversion or transfer to the
Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but
not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor
trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate
such Notes either in the name of any predecessor hereunder
or in the name of the successor to the Trustee; and in all
such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided
that the certificate of the Trustee shall have.
Section 7.11. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall
be eligible to act as Trustee under TIA Sections 310(a)(1)
and 310(a)(5) and which shall have a combined capital and
surplus of at least $50,000,000. If such corporation pub-
lishes reports of condition at least annually, pursuant to
law or to the requirements of federal, state, territorial or
District of Columbia supervising or examining authority,
then for the purposes of this Section, the combined capital
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and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign imme-
diately in the manner and with the effect hereinafter speci-
fied in this Article. The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or
certificates of interest or participation in other
securities of the Company or any Note Guarantor are
outstanding if the requirements for such exclusion set forth
in TIA Section 310(b)(1) are met.
Section 7.12. Preferential Collection of Claims
Against Company. The Trustee shall comply with TIA Section
311(a), excluding any creditor relationship listed in TIA
Section 311(b). If the present or any future Trustee shall
resign or be removed, it shall be subject to TIA Section
311(a) to the extent provided therein.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01. Termination of the Company's Obli-
gations. The Company may terminate its obligations under
the Notes and this Indenture, and the obligations of any
Note Guarantor shall terminate except those obligations
referred to in the penultimate paragraph of this Section
8.01, when:
(i) either (a) all the Notes previously
authenticated and delivered (except lost, stolen or
destroyed Notes which have been replaced or paid) have
been delivered to the Trustee for cancellation or
(b) all Notes not theretofore delivered to the Trustee
for cancellation (x) have become due and payable
hereunder, (y) will become due and payable at their
Stated Maturity within one year or (z) are to be called
for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the
expense, of the Company;
(ii) the Company shall have irrevocably deposited
or caused to be deposited with the Trustee under the
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terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds
in trust solely for the benefit of the Holders for that
purpose, cash in Dollars, U.S. Government Obligations,
or a combination thereof, in such amount as is
sufficient without consideration of reinvestment of
such interest, to pay and discharge the entire
indebtedness on the Notes (except lost, stolen or
destroyed Notes which have been replaced or paid) not
theretofore delivered to the Trustee for cancellation,
including principal of, premium, if any, and interest
on the outstanding Notes at such Stated Maturity or the
relevant Redemption Date; provided that the Trustee
shall have been irrevocably instructed to apply such
money to the payment of said principal, premium, if
any, and interest with respect to the Notes at such
Stated Maturity or Redemption Date; and, provided,
further, that from and after the time of deposit, the
money deposited shall not be subject to the rights of
holders of Senior Indebtedness pursuant to the
provisions of Article Ten;
(iii) the Company shall have paid all other sums
payable by it hereunder; and
(iv) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent
providing for the termination of the Company's
obligation under the Notes and this Indenture have been
complied with.
Notwithstanding the foregoing paragraph, the
Company's obligations in Sections 2.05, 2.06, 2.07, 2.08,
4.01, 4.02 and 7.08 and any Note Guarantor's obligations in
respect thereof shall survive until the Notes are no longer
outstanding pursuant to the last paragraph of Section 2.08.
After the Notes are no longer outstanding, the Company's
obligations in Sections 7.08, 8.04 and 8.05 and any Note
Guarantor's obligations in respect thereof shall survive.
After such delivery or irrevocable deposit the
Trustee upon request shall acknowledge in writing the dis-
charge of the Company's and any Note Guarantor's obligations
under the Notes and this Indenture except for those sur-
viving obligations specified above.
Section 8.02. Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution
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which shall be delivered to the Trustee, at any time, with
respect to the outstanding Notes and the Note Guarantees,
elect to have either paragraph (b) or paragraph (c) below be
applied to the outstanding Notes and the Note Guarantees
upon compliance with the conditions set forth in paragraph
(d).
(b) Upon the Company's exercise under paragraph
(a) of the option applicable to this paragraph (b), each of
the Company and any Note Guarantor shall be deemed to have
been released and discharged from its respective obligations
with respect to the outstanding Notes and the Note
Guarantees on the date the conditions set forth below are
satisfied (hereinafter, "defeasance"). For this purpose,
such defeasance means that the Company shall be deemed to
have paid and discharged the entire indebtedness represented
by the then outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of para-
graph (e) below and the other Sections of and matters under
this Indenture referred to in (i) and (ii) of this
paragraph, and to have satisfied all its other obligations
under such Notes and this Indenture insofar as such Notes
are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the
same), and Holders of the Notes and the Note Guarantees and
any amounts deposited under paragraph (d) below shall cease
to be subject to any obligations to, or the rights of, any
holder of Senior Indebtedness or Guarantor Senior
Indebtedness under Articles Ten, Eleven or otherwise, except
for the following which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of
Holders of outstanding Notes to receive solely from the
trust fund described in paragraph (d) below and as more
fully set forth in such paragraph, payments in respect of
the principal of, premium, if any, and interest on such
Notes when such payments are due, (ii) the Company's
obligations with respect to such Notes under Sections 2.06,
2.07 and 4.02, and, with respect to the Trustee, under
Section 7.08 and any Note Guarantor's obligations in respect
thereof, (iii) the rights, powers, trusts, duties,
indemnities and immunities of the Trustee hereunder and (iv)
this Section 8.02 and Section 8.05. Subject to compliance
with this Section 8.02, the Company may exercise its option
under this paragraph (b) notwithstanding the prior exercise
of its option under paragraph (c) below with respect to the
Notes.
(c) Upon the Company's exercise under para
graph (a) of the option applicable to this paragraph (c),
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the Company shall be released and discharged from its obli-
gations under any covenant contained in Sections 4.03
through 4.20 with respect to the outstanding Notes on and
after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Notes shall
thereafter be deemed to be not "outstanding" for the purpose
of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection
with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder and Holders
of the Notes and the Note Guarantees and any amounts
deposited under paragraph (d) below shall cease to be
subject to any obligations to, or the rights of, any holder
of Senior Indebtedness or Guarantor Senior Indebtedness
under Articles Ten, Eleven or otherwise. For this purpose,
such covenant defeasance means that, with respect to the
outstanding Notes, the Company and any Note Guarantor may
omit to comply with and shall have no liability in respect
of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason
of any reference in any such covenant to any other provision
herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under
Article Six, but, except as specified above, the remainder
of this Indenture and such Notes shall be unaffected
thereby. In addition, in the event covenant defeasance
occurs, the Events of Default specified in Sections 6.01(v),
(vi) or (vii) will no longer constitute Events of Default
with respect to the Notes.
(d) The following shall be the conditions to
application of either paragraph (b) or paragraph (c) above
to the outstanding Notes:
(i) the Company shall irrevocably have deposited
or caused to be deposited with the Trustee (or another
trustee satisfying the requirements of Section 7.11 who
shall agree to comply with the provisions of this
Section 8.02 applicable to it) as trust funds in trust
for the purpose of making the following payments,
specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Notes,
(x) cash in Dollars, or (y) U.S. Government Obligations
maturing as to principal, premium, if any, and interest
in such amounts of money and at such times as are
sufficient without consideration of any reinvestment of
such interest, to pay principal of, premium, if any,
and interest on the outstanding Notes on the Stated
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Maturity or relevant Redemption Date of such principal
or installment of interest not later than one day
before the due date of any payment, or (z) a
combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public
accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge
and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge principal of,
premium, if any, and interest on the outstanding Notes
on the Maturity Date or Redemption Date or otherwise in
accordance with the terms of this Indenture and of such
Notes; provided that the Trustee shall have received an
irrevocable written order from the Company instructing
the Trustee (or other qualifying trustee) to apply such
money or the proceeds of such U.S. Government Obli-
gations to said payments with respect to the Notes;
(ii) in the case of an election under paragraph
(b) above, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published
by, the Internal Revenue Service a ruling, which ruling
must be referred to, or (y) since the Issue Date, there
has been a change in the applicable Federal income tax
law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of
the outstanding Notes will not recognize income, gain
or loss for federal income tax purposes as a result of
such defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the
same times as would have been the case if such defea-
sance had not occurred;
(iii) in the case of an election under paragraph
(c) above, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the
Holders of the outstanding Notes will not recognize
income, gain or loss for Federal income tax purposes as
a result of such covenant defeasance and will be sub-
ject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been
the case if such covenant defeasance had not occurred;
(iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit
or, insofar as Events of Default specified in
Section 6.01(ix) or (x) are concerned, at any time
during the period ending on the 91st day after the date
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of such deposit (it being understood that this
condition shall not be deemed satisfied until the
expiration of such period);
(v) such defeasance or covenant defeasance shall
not cause the Trustee to have a conflicting interest
with respect to any securities of the Company or any
Note Guarantor;
(vi) such defeasance or covenant defeasance shall
not result in a breach or violation of, or constitute a
Default or Event of Default under, this Indenture or
any other agreement or instrument to which the Company
or any Note Guarantor is a party or by which it is
bound;
(vii) the Company shall have delivered to the
trustee an Opinion of Counsel stating that (A) the
trust funds will not be subject to any rights of
holders of Senior Indebtedness, including, without
limitation, those arising under this Indenture, and
(B) after the 91st day following the deposit or after
the date such Opinion of Counsel is delivered, the
trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally; and
(viii) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of
Counsel, each satisfactory in form and substance to the
Trustee, stating that all conditions precedent provided
for relating to either the defeasance under paragraph
(b) above or the covenant defeasance under paragraph
(c) above, as the case may be, have been complied with.
(e) All cash in Dollars and U.S. Government
Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for
purposes of this paragraph (e), the "Trustee") pursuant to
paragraph (d) above in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any
Paying Agent (other than the Company or any Affiliate of the
Company) as the Trustee may determine, to the Holders of
such Notes of all sums due and to become due thereon in
respect of principal and interest, but such money need not
be segregated from other funds except to the extent required
by law.
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The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant
to paragraph (d) above or the principal, premium, if any,
and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of
the Holders of the outstanding Notes.
Anything in this Section 8.02 to the contrary
notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon the request, in writing, by
the Company any cash in Dollars or U.S. Government
Obligations held by it as provided in paragraph (d) above
which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to
be deposited to effect an equivalent legal defeasance or
covenant defeasance.
Section 8.03. Application of Trust Money. The
Trustee shall hold in trust cash in Dollars or U.S.
Government Obligations deposited with it pursuant to
Sections 8.01 and 8.02, and shall apply the deposited cash
in Dollars and U.S. Government Obligations in accordance
with this Indenture to the payment of principal of, premium,
if any, and interest on the Notes.
Section 8.04. Repayment to Company or Note
Guarantors. Subject to Sections 7.08, 8.01 and 8.02, the
Trustee shall promptly pay to the Company, or if deposited
with the Trustee by any Note Guarantor, to such Note
Guarantor, upon receipt by the Trustee of an Officers'
Certificate, any excess money, determined in accordance with
Section 8.02, held by it at any time. The Trustee and the
Paying Agent shall pay to the Company or any Note Guarantor,
as the case may be, upon receipt by the Trustee or the
Paying Agent, as the case may be, of an Officers'
Certificate, any money held by it for the payment of
principal, premium, if any, or interest that remains
unclaimed for two years; provided that the Trustee and the
Paying Agent before being required to make any payment may,
but need not, at the expense of the Company cause to be
published once in a newspaper of general circulation in The
City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that
after a date specified therein, which shall be at least 30
days from the date of such publication or mailing, any
unclaimed balance of such money then remaining will be
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repaid to the Company. After payment to the Company or any
Note Guarantor, as the case may be, Holders entitled to
money must look solely to the Company for payment as general
creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee
or Paying Agent with respect to such money shall thereupon
cease.
Section 8.05. Reinstatement. If the Trustee or
Paying Agent is unable to apply any cash in Dollars or U.S.
Government Obligations in accordance with this Indenture by
reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then
the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had
been made pursuant to this Indenture until such time as the
Trustee is permitted to apply all such cash in Dollars or
U.S. Government Obligations in accordance with this
Indenture; provided that if the Company has made any payment
of principal of, premium, if any, or interest on any Notes
because of the reinstatement of its obligations, the Company
or any such Note Guarantor, as the case may be, shall be
subrogated to the rights of the Holders of such Notes to
receive such payment from the cash in Dollars or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders. The
Company, the Note Guarantors, and the Trustee may amend,
waive or supplement this Indenture or the Notes without
notice to or consent of any Holder:
(a) to cure any ambiguity, omission, defect or
inconsistency;
(b) to comply with Article Five;
(c) to add Guarantees with respect to the Notes;
(d) to secure the Notes;
(e) to add to the covenants of the Company for
the benefit of the Holders;
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(f) to surrender any right or power conferred
upon the Company or any Note Guarantor;
(g) to make any change that does not adversely
affect the rights of any Holder; or
(h) to comply with any requirements of the SEC in
order to effect or maintain the qualification of this
Indenture under the TIA.
After an amendment, supplement or waiver under
this Section 9.01 becomes effective, the Company shall mail
to the Holders, with a copy to the Trustee, a notice briefly
describing the amendment, supplement or waiver. Any failure
of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity
of any supplemental indenture.
Notwithstanding the foregoing and Section 9.02, on
or after the date hereof (but after the execution and
delivery of this Indenture and the issuance of the Notes and
after or concurrently with consummation of the Merger), the
Company, Holding and the Trustee shall execute and deliver
the First Supplemental Indenture attached as Exhibit B
hereto, without notice to or consent of any Noteholder.
Section 9.02. With Consent of Holders. Subject
to Section 6.04, the Company and the Note Guarantors when
authorized by Board Resolutions of their respective Boards
of Directors, and the Trustee may amend or modify this
Indenture or the Notes with the written consent of the
Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding, and the Holders of not
less than a majority in aggregate principal amount of the
Notes then outstanding by written notice to the Trustee, may
waive future compliance by the Company or any Note Guarantor
with any provision of this Indenture, the Notes or the Note
Guarantees except a default in the payment of principal of,
premium, if any, or interest on the Notes.
Notwithstanding the provisions of this Section
9.02, without the consent of each Holder affected, an amend-
ment, modification or waiver, including a waiver pursuant to
Section 6.04, may not:
(a) reduce the principal amount outstanding of or
extend the Stated Maturity of any Note or alter the
redemption provisions with respect thereto;
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(b) make the principal of, premium, if any, or
interest on any Note payable in money other than that
stated in the Note;
(c) reduce the percentage in outstanding aggre-
gate principal amount of Notes the Holders of which
must consent to an amendment, supplement or waiver of
or consent to take any action under any provision of
this Indenture, the Notes or any Note Guarantee;
(d) modify or change Section 4.14 or any
provision of this Indenture affecting the subordination
of the Notes or any Note Guarantee in a manner adverse
to the Holders;
(e) impair the right of any Holder to receive
payment of principal of, premium, if any, and interest
on such Holder's Notes on or after the due dates
therefor or to institute suit for the enforcement of
any payment on or with respect to the Notes;
(f) waive a default in the payment of the prin-
cipal of, premium, if any, or interest on, or
redemption or an offer to purchase required hereunder
with respect to, any Note or any Note Guarantee (except
for any waiver of a default in payment to the extent
resulting from a declaration of acceleration under this
Indenture, which declaration has been rescinded by the
Holders as contemplated by the third full paragraph
under Section 6.02);
(g) following the occurrence of a Change of
Control or an Asset Sale, amend, change or modify the
obligation of the Company to offer to repurchase and to
repurchase the Notes in the event of a Change of
Control or make and consummate the Excess Proceeds
Offer with respect to any Asset Sale, including by
modifying any of the provisions or definitions with
respect thereto;
(h) reduce or change the rate or time for payment
of interest on the Notes;
(i) modify this Section 9.02 or Section 6.04 or
Section 6.07; or
(j) release any Significant Note Guarantor from
any of its obligations under its Note Guarantee or this
Indenture other than in compliance with this Indenture.
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Notwithstanding the foregoing, no amendment shall
modify any provision of this Indenture so as to affect
adversely the rights of any Senior Indebtedness or any
Guarantor Senior Indebtedness representing Credit Agreement
Obligations at the time outstanding which are entitled to
the benefits of subordination under this Indenture (or any
group or representative thereof authorized to give a
consent) without the written consent of such holders.
It shall not be necessary for the consent of the
Holders under this Section 9.02 to approve the particular
form of any proposed amendment, supplement or waiver, but it
shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under
this Section 9.02 becomes effective, the Company shall mail
to the Holders, with a copy to the Trustee, a notice briefly
describing the amendment, supplement or waiver. Any failure
of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity
of any supplemental indenture.
Section 9.03. Compliance with Trust Indenture
Act. Every amendment of or supplement to this Indenture,
the Notes or the Note Guarantees shall comply with the TIA
as then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective,
a consent to it by a Holder is a continuing consent by such
Holder and every subsequent Holder of that Note or portion
of that Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made
on any Note. However, any such Holder or subsequent Holder
may revoke the consent as to his Note or portion of a Note
prior to such amendment, supplement or waiver becoming
effective. Such revocation shall be effective only if the
Trustee receives the notice of revocation before the date
the amendment, supplement or waiver becomes effective.
Notwithstanding the above, nothing in this paragraph shall
impair the right of any Holder under Section 316(b) of the
TIA.
The Company may, but shall not be obligated to,
fix a record date for the purpose of determining the Holders
entitled to consent to any amendment, supplement or waiver.
If a record date is fixed, then notwithstanding the second
and third sentences of the immediately preceding paragraph,
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those Persons who were Holders at such record date (or their
duly designated proxies), and only those Persons, shall be
entitled to consent to such amendment, supplement or waiver
or to revoke any consent previously given, whether or not
such Persons continue to be Holders after such record date.
Such consent shall be effective only for actions taken
within 120 days after such record date.
After an amendment, supplement or waiver becomes
effective, it shall bind every Holder, unless it makes a
change described in any of clauses (a) through (j) of Sec-
tion 9.02; if it makes such a change, the amendment, sup-
plement or waiver shall bind every subsequent Holder of a
Note or portion of a Note that evidences the same debt as
the consenting Holder's Note.
Section 9.05. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a
Note, the Trustee shall (in accordance with the specific
direction of the Company) request the Holder of the Note to
deliver it to the Trustee. The Trustee shall (in accordance
with the specific direction of the Company) place an appro-
priate notation on the Note about the changed terms and
return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the
Note shall issue and the Trustee shall authenticate a new
Note that reflects the changed terms. Failure to make the
appropriate notation or issue a new Note shall not affect
the validity and effect of such amendment, supplement or
waiver.
Section 9.06. Trustee May Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article Nine if the amendment,
supplement or waiver does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it
does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver, the
Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and shall be fully
protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that the execution of any amend-
ment, supplement or waiver is authorized or permitted by
this Indenture, that it is not inconsistent herewith and
that it will be valid and binding upon the Company in accor-
dance with its terms.
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ARTICLE TEN
GUARANTEE OF NOTES
Section 10.01. Note Guarantee. Subject to the
provisions of this Article Ten, Holding hereby absolutely,
unconditionally and irrevocably guarantees to each Holder of
a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, as a primary obliger
and not merely as a surety, that: (a) the principal of,
premium, if any, and interest on the Notes shall be duly and
punctually paid in full when due, whether at maturity, by
acceleration, by redemption or otherwise, and interest on
the overdue principal and (to the extent permitted by law)
interest, if any, on the Notes and all other obligations of
the Company to the Holders or the Trustee hereunder or
thereunder (including fees and expenses, including
reasonable attorneys' fees and expenses) and all other
Senior Subordinated Note Obligations shall be promptly paid
in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time
of payment or renewal of any Notes or any of such other
Senior Subordinated Note Obligations, the same shall be
promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at
Stated Maturity, by acceleration, by redemption or
otherwise. Failing payment when due of any amount so
guaranteed, or failing performance of any other obligation
of the Company to the Holders, for whatever reason, Holding
shall be obligated to pay, or to perform or cause the
performance of, the same immediately. This Note Guarantee
shall be a continuing guarantee of payment, performance and
compliance when due (and not a guarantee of collection) in
respect of all Senior Subordinated Note Obligations and
shall remain in full force and effect until the payment in
full of all Senior Subordinated Note Obligations. An Event
of Default under this Indenture or the Notes shall
constitute an event of default under this Note Guarantee,
and shall entitle the Holders of Notes to accelerate the
obligations of Holding hereunder in the same manner and to
the same extent as the obligations of the Company.
Holding hereby agrees that its obligations
hereunder shall be absolute and unconditional, irrespective
of the validity, regularity or enforceability of the Notes
or this Indenture, any extension or renewal of this
Indenture or the Notes, the absence of any action to enforce
the same, any waiver or consent by any Holder of the Notes
with respect to any provisions hereof or thereof, any
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release of any other Note Guarantor, the recovery of any
judgment against the Company, any action to enforce the
same, whether or not a Note Guarantee is affixed to any
particular Note, or any other circumstance which might
otherwise constitute a legal or equitable discharge or
defense of a guarantor. Holding hereby waives the benefit
of diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands
whatsoever and covenants that its Note Guarantee will not be
discharged except by complete performance of the obligations
contained in the Notes, this Indenture and this Note
Guarantee. If any Holder or the Trustee is required by any
court or otherwise to return to the Company or to Holding,
or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or Holding, any
amount paid by the Company or Holding to the Trustee or such
Holder, this Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
Holding further agrees that, as between it, on the one hand,
and the Holders of Notes and the Trustee, on the other hand,
(a) subject to this Article Ten, the maturity of the
obligations guaranteed hereby may be accelerated as provided
in Article Six hereof for the purposes of this Note
Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (b) in the event of any
acceleration of such obligations as provided in Article Six
hereof, such obligations (whether or not due and payable)
shall forthwith become due and payable by Holding for the
purpose of this Note Guarantee.
This Note Guarantee shall remain in full force and
effect and continue to be effective should any petition be
filed by or against the Company for liquidation or reor-
ganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should a receiver
or trustee be appointed for all or any significant part of
the Company's assets, and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance
of the Notes are, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned
by any obligee on the Notes, whether as a "voidable pref-
erence," "fraudulent transfer" or otherwise, all as though
such payment or performance had not been made. In the event
that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Notes shall, to the
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fullest extent permitted by law, be reinstated and deemed
reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
Any term or provision of this Indenture to the
contrary notwithstanding, the maximum aggregate amount of
the obligations guaranteed hereunder by any Note Guarantor
shall not exceed the maximum amount that can be hereby
guaranteed without rendering this Indenture, as it relates
to any Note Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
Section 10.02. Execution and Delivery by Holding
of Note Guarantee. To further evidence the Note Guarantee
set forth in Section 10.01, Holding hereby agrees that a
notation of such Note Guarantee, substantially in the form
included in the form of Note included in Exhibit A hereto,
shall be endorsed on each Note authenticated and delivered
by the Trustee after such Note Guarantee is executed and
executed by either manual or facsimile signature of an
Officer of Holding. The validity and enforceability of any
Note Guarantee shall not be affected by the fact that it is
not affixed to any particular Note.
Holding hereby agrees that its Note Guarantee set
forth in Section 10.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a
notation of such Note Guarantee.
If an Officer of Holding whose signature is on
this Indenture or a Note no longer holds that office at the
time the Trustee authenticates such Note or at any time
thereafter, Holding's Note Guarantee of such Note shall be
valid nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due
delivery of the Note Guarantee set forth in this Indenture
on behalf of Holding.
Section 10.03. Additional Note Guarantors. Each
Restricted Subsidiary that is required to become a Note
Guarantor pursuant to Section 4.12 or 4.13, and each
Restricted Subsidiary that the Company causes to become a
Note Guarantor pursuant to Section 4.13 or Section 4.17,
shall promptly (a) execute and deliver to the Trustee a
supplemental indenture in form and substance reasonably
satisfactory to the Trustee, which shall subject such
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Restricted Subsidiary to the provisions of this Indenture as
a Note Guarantor on substantially the same terms as set
forth in this Article Ten with respect to the Note Guarantee
of Holding, and (b) the Company shall deliver to the Trustee
an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that such supplemental
indenture has been duly authorized, executed and delivered
by such Restricted Subsidiary and that, subject to the
applicable bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, reorganization, moratorium and other
laws now or hereafter in effect affecting creditors' rights
generally and the general principles of equity (including,
without limitation, standards of materiality, good faith,
fair dealing and reasonableness), such supplemental
indenture is a valid and binding agreement of such
Restricted Subsidiary, enforceable against such Restricted
Subsidiary in accordance with its terms.
Section 10.04. Note Guarantee Obligations
Subordinated to Guarantor Senior Indebtedness. Holding
covenants and agrees, and each Holder of a Note, by its
acceptance thereof, likewise covenants and agrees, that all
payments pursuant to the Note Guarantee made by or on behalf
of Holding are hereby expressly made subordinate and,
subject, in right of payment as provided in this Article
Ten, to the prior payment in full in cash or cash equiva-
lents of all amounts payable under all existing and future
Guarantor Senior Indebtedness of Holding.
This Section 10.04 and the following Sections
10.05 through 10.17 of this Article Ten shall constitute a
continuing offer to all Persons who, in reliance upon such
provisions, become holders of, or continue to hold Guarantor
Senior Indebtedness of Holding and, to the extent set forth
in Section 10.06(b), holders of Designated Senior
Indebtedness; and such provisions are made for the benefit
of the holders of Guarantor Senior Indebtedness of Holding
and, to the extent set forth in Section 10.06(b), holders of
Designated Senior Indebtedness; and such holders (to such
extent) are made obligees hereunder and they or each of them
may enforce such provisions.
Section 10.05. Payment Over of Proceeds upon
Dissolution, etc. In the event of (a) any insolvency or
bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to Holding or
its assets, or (b) any liquidation, dissolution or other
winding-up of Holding, whether voluntary or involuntary, or
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(c) any assignment for the benefit of creditors or other
marshalling of assets or liabilities of Holding, then and in
any such event:
(1) the holders of all Guarantor Senior Indebt-
edness of Holding shall be entitled to receive payment
in full in cash or cash equivalents, or provision
acceptable to the requisite holders of Guarantor Senior
Indebtedness of Holding made for such payment, of all
amounts due on or in respect of all such Guarantor
Senior Indebtedness before the Holders are entitled to
receive any payment or distribution, whether in cash,
property or securities (excluding Permitted Junior
Securities) on account of the Senior Subordinated Note
Obligations or for the acquisition of any of the Notes;
and
(2) any payment or distribution of assets of
Holding of any kind or character, whether in cash,
property or securities (excluding Permitted Junior
Securities), by set-off or otherwise, to which the
Holders or the Trustee would be entitled but for the
subordination provisions of this Article Ten shall be
paid by the liquidating trustee or agent or other
Person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of
Guarantor Senior Indebtedness of Holding or their
representative or representatives or to the trustee or
trustees under any indenture under which any instru-
ments evidencing any of such Guarantor Senior Indebt-
edness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of such
Guarantor Senior Indebtedness held or represented by
each, to the extent necessary to make payment in full
in cash or cash equivalents of all such Guarantor
Senior Indebtedness remaining unpaid, after giving
effect to any concurrent payment or distribution to the
holders of such Guarantor Senior Indebtedness; and
(3) in the event that, notwithstanding the fore-
going provisions of this Section 10.05, the Trustee or
the Holder of any Note shall have received any payment
or distribution of assets of Holding of any kind or
character, whether in cash, property or securities, in
respect of any Senior Subordinated Note Obligations
under this Note Guarantee before all Guarantor Senior
Indebtedness of Holding is paid in full in cash or cash
equivalents or payment thereof provided for, then and
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in such event such payment or distribution (excluding
Permitted Junior Securities) shall be paid over or
delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee,
agent or other Person making payment or distribution of
assets of Holding for application to the payment of all
such Guarantor Senior Indebtedness remaining unpaid, to
the extent necessary to pay all of such Guarantor
Senior Indebtedness in full in cash or cash equiv-
alents, after giving effect to any concurrent payment
or distribution to or for the holders of such Guarantor
Senior Indebtedness.
The consolidation of Holding with, or the merger
of Holding with or into, another Person or the liquidation
or dissolution of Holding following the conveyance, transfer
or lease of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set
forth in this Indenture shall not be deemed a dissolution,
winding-up, liquidation, reorganization, assignment for the
benefit of creditors or marshalling of assets and
liabilities of Holding for the purposes of this Indenture if
the Person formed by such consolidation or the surviving
entity of such merger or the Person which acquires by
conveyance, transfer or lease such properties and assets
substantially as an entirety, as the case may be, shall, as
a part of such consolidation, merger, conveyance, transfer
or lease, comply with the conditions set forth in this
Indenture.
Section 10.06. Suspension of Note Guarantee Obli-
gations When Guarantor Senior Indebtedness in Default.
(a) Unless Section 10.05 shall be applicable, after the
occurrence of a Payment Default no payment or distribution
of any assets of Holding of any kind or character shall be
made by or on behalf of Holding on account of the Senior
Subordinated Note Obligations or on account of the purchase,
redemption, defeasance or other acquisition of the Senior
Subordinated Note Obligations or any of the obligations of
Holding under this Note Guarantee unless and until such
Payment Default shall have been cured or waived or shall
have ceased to exist or the Senior Indebtedness as to which
such Payment Default relates shall have been discharged or
paid in full in cash or cash equivalents, after which,
subject to Section 10.05 (if applicable), Holding shall
resume making any and all required payments in respect of
its obligations under this Note Guarantee.
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(b) Unless Section 10.05 shall be applicable,
during any Payment Blockage Period in respect of the Notes,
no payment or distribution of any assets of Holding of any
kind or character shall be made by or on behalf of Holding
on account of the Senior Subordinated Note Obligations or on
account of the purchase, redemption, defeasance or other
acquisition of the Senior Subordinated Note Obligations or
on account of any of the other obligations of Holding under
this Note Guarantee, provided that the foregoing prohibition
shall not apply unless such Payment Blockage Period has been
instituted under Section 11.03(b) by a Senior Representative
acting for holders of Designated Senior Indebtedness which
also constitutes Guarantor Senior Indebtedness. Upon the
termination of any Payment Blockage Period, subject to
Section 10.05 (if applicable), Holding shall resume making
any and all required payments in respect of its obligations
under this Note Guarantee.
(c) In the event that, notwithstanding the fore-
going, the Trustee or the Holder of any Note shall have
received any payment from Holding prohibited by the fore-
going provisions of this Section 10.06, then and in such
event such payment shall be paid over and delivered forth-
with to the Senior Representative initiating the Payment
Blockage Period, in trust for distribution to the holders of
Guarantor Senior Indebtedness of Holding or, if no amounts
are then due in respect of Guarantor Senior Indebtedness of
Holding, prompt return to Holding, or as a court of
competent jurisdiction shall direct.
Section 10.07. Release of Note Guarantee.
(a) Concurrently with the payment in full of all Senior
Subordinated Note Obligations, then Holding shall be
released from and relieved of its obligations under this
Article Ten. Upon the delivery by the Company to the
Trustee of an Officers' Certificate and, if requested by the
Trustee, an Opinion of Counsel stating that the transaction
giving rise to the release of this Note Guarantee was made
by the Company in accordance with the provisions of this
Indenture and the Notes, the Trustee shall execute any
documents reasonably required in order to evidence the
release of Holding from its obligations under this Note
Guarantee. If any of the Senior Subordinated Note
Obligations are revived and reinstated after the termination
of this Note Guarantee, then all of the obligations of
Holding under this Note Guarantee shall be revived and
reinstated as if this Note Guarantee had not been terminated
until such time as the Senior Subordinated Note Obligations
are paid in full, and Holding shall enter into an amendment
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to this Note Guarantee, reasonably satisfactory to the
Trustee, evidencing such revival and reinstatement.
(b) Any Restricted Subsidiary that becomes a Note
Guarantor pursuant to Section 4.12, 4.13 or 4.17 shall be
released and relieved of its obligations under its Note
Guarantee in accordance with the terms thereof, as provided
in Section 4.12 or 4.13.
Section 10.08. Waiver of Subrogation. Holding
hereby irrevocably waives any claim or other rights which it
may now or hereafter acquire against the Company that arise
from the existence, payment, performance or enforcement of
Holding's obligations under this Note Guarantee and this
Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification,
and any right to participate in any claim or remedy of any
Holder of Notes against the Company, whether or not such
claim, remedy or right arises in equity, or under contract,
statute or common law. If any amount shall be paid to
Holding in violation of the preceding sentence and the Notes
shall not have been paid in full, such amount shall have
been deemed to have been paid to Holding for the benefit of,
and held in trust for the benefit of, the Holders of the
Notes, and shall, subject to the subordination provisions of
this Article and to Article Eleven, forthwith be paid to the
Trustee for the benefit of such Holders to be credited and
applied upon the Notes, whether matured or unmatured, in
accordance with the terms of this Indenture.
Section 10.09. Provisions Solely to Define
Relative Rights. The subordination provisions of this
Article Ten are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes on
the one hand and the holders of Guarantor Senior Indebt-
edness of Holding and, to the extent set forth in Section
10.06, holders of Designated Senior Indebtedness on the
other hand. Nothing contained in this Article Ten or else-
where in this Indenture or in the Notes is intended to or
shall (a) impair, as among Holding, its creditors other than
holders of its Guarantor Senior Indebtedness and the Holders
of the Notes, the obligation of Holding, which is absolute
and unconditional, to make payments to the Holders in
respect of its obligations under this Note Guarantee as and
when the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights against
Holding of the Holders of the Notes and creditors of Holding
other than the holders of the Guarantor Senior Indebtedness
of Holding; or (c) prevent the Trustee or the Holder of any
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Note from exercising all remedies otherwise permitted by
applicable law upon Default or an Event of Default under
this Indenture, subject to the rights, if any, under the
subordination provisions of this Article Ten of the holders
of Guarantor Senior Indebtedness of Holding hereunder and,
to the extent set forth in Section 10.06, holders of
Designated Senior Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding-up, assignment for
the benefit of creditors or other marshaling of assets and
liabilities of Holding referred to in Section 10.05, to
receive, pursuant to and in accordance with such Section,
cash, property and securities otherwise payable or deliv-
erable to the Trustee or such Holder, or (2) under the
conditions specified in Section 10.06, to prevent any pay-
ment prohibited by such Section or enforce their rights
pursuant to Section 10.06(c).
The failure by Holding to make a payment in
respect of its obligations under this Note Guarantee by
reason of any provision of this Article Ten shall not be
construed as preventing the occurrence of a Default or an
Event of Default hereunder.
Section 10.10. Trustee to Effectuate
Subordination. Each Holder of a Note by his acceptance
thereof authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article Ten
and appoints the Trustee his attorney-in-fact for any and
all such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of
Holding whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for
the unpaid balance of the indebtedness of Holding owing to
such Holder in the form required in such proceedings and the
causing of such claim to be approved. If the Trustee does
not file such a claim prior to 30 days before the expiration
of the time to file such a claim, the holders of Guarantor
Senior Indebtedness, or any Senior Representative, may file
such a claim on behalf of Holders of the Notes.
Section 10.11. No Waiver of Subordination
Provisions. (a) No right of any present or future holder
of any Guarantor Senior Indebtedness or Designated Senior
Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Company or
Holding or by any act or failure to act, in good faith, by
any such holder, or by any non-compliance by the Company or
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Holding with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
(b) Without limiting the generality of subsection
(a) of this Section 10.11, the holders of Guarantor Senior
Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of
the Notes, without incurring responsibility to the Holders
of the Notes and without impairing or releasing the subordi-
nation provided in this Article Ten or the obligations
hereunder of the Holders of the Notes to the holders of such
Guarantor Senior Indebtedness, do any one or more of the
following: (1) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, such
Guarantor Senior Indebtedness or any Senior Indebtedness as
to which such Guarantor Senior Indebtedness relates or any
instrument evidencing the same or any agreement under which
such Guarantor Senior Indebtedness or such Senior Indebted-
ness is outstanding; (2) sell, exchange, release or other-
wise deal with any property pledged, mortgaged or otherwise
securing such Guarantor Senior Indebtedness or any Senior
Indebtedness as to which such Guarantor Senior Indebtedness
relates; (3) release any Person liable in any manner for the
collection or payment of such Guarantor Senior Indebtedness
or any Senior Indebtedness as to which such Guarantor Senior
Indebtedness relates; and (4) exercise or refrain from
exercising any rights against Holding and any other Person;
provided that in no event shall any such actions limit the
right of the Holders of the Notes to take any action to
accelerate the maturity of the Notes pursuant to Article Six
hereof or to pursue any rights or remedies hereunder or
under applicable laws if the taking of such action does not
otherwise violate the terms of this Indenture.
Section 10.12. Notice to Trustee. (a) The
Company and Holding shall give prompt written notice to the
Trustee of any fact known to Holding which would prohibit
the making of any payment to or by the Trustee in respect of
the Notes. Notwithstanding the subordination provisions of
this Article or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment
to or by the Trustee in respect of the Notes, unless and
until the Trustee shall have received written notice thereof
at its Corporate Trust Office from the Company, Holding or a
holder of its Guarantor Senior Indebtedness or from any
representative, trustee, fiduciary or agent therefor; and,
prior to the receipt of any such written notice, the
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Trustee, subject to the provisions of this Section 10.12,
shall be entitled in all respects to assume that no such
facts exist; provided that if the Trustee shall not have
received the notice provided for in this Section 10.12 at
least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose
under this Indenture (including, without limitation, the
payment of the principal of or interest on any Note), then,
anything herein contained to the contrary notwithstanding
but without limiting the rights and remedies of the holders
of such Guarantor Senior Indebtedness or any representative,
trustee, fiduciary or agent thereof, the Trustee shall have
full power and authority to receive such money and to apply
the same to the purpose for which such money was received
and shall not be affected by any notice to the contrary
which may be received by it within two Business Days prior
to such date; nor shall the Trustee be charged with
knowledge of the curing of any such default or the
elimination of the act or condition preventing any such
payment unless and until the Trustee shall have received an
Officers' Certificate to such effect.
(b) Subject to the provisions of Section 7.01,
the Trustee shall be entitled to rely on the delivery to it
of a written notice to the Trustee, by a Person representing
himself to be a holder of Guarantor Senior Indebtedness (or
a representative, trustee, fiduciary or agent therefor). In
the event that the Trustee determines in good faith that
further evidence is required with respect to the right of
any Person as a holder of Guarantor Senior Indebtedness to
participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to
the amount of Guarantor Senior Indebtedness held by such
Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this
Article Ten, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to
receive such payment.
Section 10.13. Reliance on Judicial Order or
Certificate of Liquidating Agent Regarding Dissolution, etc.
Upon any payment or distribution of assets of Holding
referred to in this Article Ten, the Trustee, subject to the
provisions of Section 7.01, and the Holders shall be
entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which such insolvency,
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bankruptcy, receivership, liquidation, reorganization,
dissolution, winding-up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the
benefit of creditors, agent or other Person making such
payment or distribution, delivered to the Trustee or to the
Holders, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the
holders of Guarantor Senior Indebtedness and other
Indebtedness of Holding, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article
Ten; provided that the foregoing shall apply only if such
court has been fully apprised of the provisions of this
Article Ten. The Trustee is not responsible for determining
whether or not the court has been fully apprised of the
provisions of this Article Ten.
Section 10.14. Rights of Trustee as a Holder of
Guarantor Senior Indebtedness; Preservation of Trustee's
Rights. The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article Ten
with respect to any Guarantor Senior Indebtedness which may
at any time be held by the Trustee, to the same extent as
any other holder of such Guarantor Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article Ten
shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.08.
Section 10.15. Article Ten Applicable to Paying
Agents. In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
Ten shall in such case (unless the context otherwise
requires) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article
Ten in addition to or in place of the Trustee; provided that
Section 10.14 shall not apply to the Company or any Affil-
iate of the Company if it or such Affiliate acts as Paying
Agent.
Section 10.16. No Suspension of Remedies.
Nothing contained in this Article Ten shall limit the right
of the Trustee or the Holders of Notes to take any action to
accelerate the maturity of the Notes pursuant to Article Six
or to pursue any rights or remedies hereunder or under
applicable law, subject to the rights, if any, under this
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Article Ten of the holders, from time to time, of Guarantor
Senior Indebtedness.
Section 10.17. Trustee's Relation to Guarantor
Senior Indebtedness. With respect to the holders of
Guarantor Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article
Ten (and in Article Eleven with respect to Senior
Indebtedness), and no implied covenants or obligations with
respect to the holders of Guarantor Senior Indebtedness
shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness and the Trustee
shall not be liable to any holder of Guarantor Senior
Indebtedness if it shall mistakenly in the absence of gross
negligence or willful misconduct pay over or deliver to
Holders, Holding or any other Person moneys or assets to
which any holder of Guarantor Senior Indebtedness shall be
entitled by virtue of this Article Ten or otherwise.
Section 10.18. Subrogation. Upon the payment in
full in cash or cash equivalents of all amounts payable
under or in respect of Guarantor Senior Indebtedness, the
Holders shall be subrogated to the rights of the holders of
such Guarantor Senior Indebtedness to receive payments or
distributions of assets of Holding made on such Guarantor
Senior Indebtedness until all amounts due under this Note
Guarantee shall be paid in full; and for the purposes of
such subrogation, no payments or distributions to holders of
such Guarantor Senior Indebtedness of any cash, property or
securities to which Holders of the Notes would be entitled
except for the provisions of this Article Ten, and no
payment pursuant to the provisions of this Article Ten to
holders of such Guarantor Senior Indebtedness by the
Holders, shall, as among Holding, its creditors other than
holders of such Guarantor Senior Indebtedness and the
Holders, be deemed to be a payment by Holding to or on
account of such Guarantor Senior Indebtedness) it being
understood that the provisions of this Article Ten are
solely for the purpose of defining the relative rights of
the holders of such Guarantor Senior Indebtedness, on the
one hand, and the Holders, on the other hand.
If any payment or distribution to which the
Holders would otherwise have been entitled but for the
provisions of this Article Ten shall have been applied,
pursuant to the provisions of this Article Ten, to the
payment of all amounts payable under Guarantor Senior
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Indebtedness, then and in such case, the Holders shall be
entitled to receive from the holders of such Guarantor
Senior Indebtedness at the time outstanding any payments or
distributions received by such holders of Guarantor Senior
Indebtedness in excess of the amount sufficient to pay all
amounts payable under or in respect of such Guarantor Senior
Indebtedness in full.
ARTICLE ELEVEN
SUBORDINATION OF NOTES
Section 11.01. Notes Subordinate to Senior
Indebtedness. The Company covenants and agrees, and each
Holder of a Note, by his acceptance thereof, likewise cove-
nants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article Eleven, the Indebt-
edness represented by the Notes and the payment of the
Senior Subordinated Note Obligations are hereby expressly
made subordinate and subject in right of payment as provided
in this Article to the prior payment in full in cash or cash
equivalents of all amounts payable under all existing and
future Senior Indebtedness.
This Article Eleven shall constitute a continuing
offer to all Persons who, in reliance upon such provisions,
become holders of, or continue to hold Senior Indebtedness;
and such provisions are made for the benefit of the holders
of Senior Indebtedness; and such holders are made obligees
hereunder and they or each of them may enforce such pro-
visions.
Section 11.02. Payment over of Proceeds upon
Dissolution, etc. In the event of (a) any insolvency or
bankruptcy case or proceeding, or any receivership, liqui-
dation, reorganization or other similar case or proceeding
in connection therewith, relating to the Company or to its
assets, or (b) any liquidation, dissolution or other
winding-up of the Company, whether voluntary or involuntary,
or (c) any assignment for the benefit of creditors or other
marshalling of assets or liabilities of the Company, then
and in any such event:
(1) the holders of Senior Indebtedness shall be
entitled to receive payment in full in cash or cash
equivalents or provision acceptable to the requisite
holders of Senior Indebtedness made for such payments,
of all amounts due on or in respect of Senior
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Indebtedness before the Holders are entitled to receive
any payment or distribution, whether in cash, property
or securities (excluding Permitted Junior Securities)
on account of Senior Subordinated Note Obligations or
for the acquisition of any of the Notes; and
(2) any payment or distribution of assets of the
Company of any kind or character, whether in cash,
property or securities (excluding Permitted Junior
Securities), by set-off or otherwise, to which the
Holders or the Trustee would be entitled but for the
provisions of this Article shall be paid by the liqui-
dating trustee or agent or other Person making such
payment or distribution, whether a trustee in bank-
ruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or
trustees under any indenture under which any instru-
ments evidencing any of such Senior Indebtedness may
have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the Senior
Indebtedness held or represented by each, to the extent
necessary to make payment in full in cash or cash
equivalents of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment
or distribution to the holders of such Senior Indebt-
edness; and
(3) in the event that, notwithstanding the fore-
going provisions of this Section 11.02, the Trustee or
the Holder of any Note shall have received any payment
or distribution of properties or assets of the Company
of any kind or character, whether in cash, property or
securities, by set off or otherwise in respect of any
Senior Subordinated Note Obligations before all Senior
Indebtedness is paid or provided for in full in cash or
cash equivalents, then and in such event such payment
or distribution (excluding Permitted Junior Securities)
shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making
payment or distribution of assets of the Company for
application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full in cash or cash equiv-
alents, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebt-
edness.
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The consolidation of the Company with, or the
merger of the Company with or into, another Person or the
liquidation or dissolution of the Company following the
conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the
terms and conditions set forth in Article Five hereof shall
not be deemed a dissolution, winding-up, liquidation, reor-
ganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company for the
purposes of this Article if the Person formed by such con-
solidation or the surviving entity of such merger or the
Person which acquires by conveyance, transfer or lease such
properties and assets substantially as an entirety, as the
case may be, shall, as a part of such consolidation, merger,
conveyance, transfer or lease, comply with the conditions
set forth in such Article Five.
Section 11.03. Suspension of Payment When Senior
Indebtedness in Default. (a) Unless Section 11.02 shall be
applicable, upon the occurrence of a Payment Default, no
direct or indirect payment or distribution of any assets of
the Company of any kind or character shall be made by or on
behalf of the Company on account of the Senior Subordinated
Note Obligations or on account of the purchase or redemption
or other acquisition of any Senior Subordinated Note Obli-
gations unless and until such Payment Default shall have
been cured or waived or shall have ceased to exist or such
Senior Indebtedness shall have been discharged or paid in
full in cash in cash equivalents, after which, subject to
Section 11.02 (if applicable), the Company shall resume
making any and all required payments in respect of the Notes
and the other Senior Subordinated Note Obligations, includ-
ing any missed payments.
(b) Unless Section 11.02 shall be applicable,
upon (1) the occurrence of a Non-payment Default and (2)
receipt by the Trustee and the Company from a Senior
Representative of written notice of such occurrence stating
that such notice is a Payment Blockage Notice pursuant to
Section 11.03(b) of this Indenture, no payment or
distribution of any assets of the Company of any kind or
character shall be made by or on behalf of the Company on
account of any Senior Subordinated Note Obligations or on
account of the purchase or redemption or other acquisition
of Senior Subordinated Note Obligations for a period
("Payment Blockage Period") commencing on the date of
receipt by the Trustee of such notice unless and until the
earlier to occur of the following events (subject to any
blockage of payments that may then be in effect under
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Section 11.02 or subsection (a) of this Section 11.03):
(i) 179 days shall have elapsed since receipt of such
notice, (ii) the date on which such Non-payment Default is
cured or waived or ceases to exist (provided that no other
Payment Default or Non-payment Default has occurred or is
then continuing after giving effect to such cure or waiver),
(iii) the date on which such Designated Senior Indebtedness
is discharged or paid in full in cash or cash equivalents or
(iv) the date on which such Payment Blockage Period shall
have been terminated by express written notice to the
Company or the Trustee from the Senior Representative
initiating such Payment Blockage Period, after which,
subject to Section 11.02 (if applicable), the Company shall
promptly resume making any and all required payments in
respect of the Senior Subordinated Note Obligations,
including any missed payments. Notwithstanding any other
provision of this Indenture, only one Payment Blockage
Period, whether with respect to the Notes, any Note
Guarantee or the Notes and the Note Guarantees collectively,
may be commenced within any 360 consecutive day period. No
Non-payment Default with respect to Designated Senior
Indebtedness that existed or was continuing on the date of
the commencement of any Payment Blockage Period with respect
to the Designated Senior Indebtedness initiating such
Payment Blockage Period (other than any such Non-payment
Default which was not and could not reasonably be expected
to have been known by the holders or the Senior
Representative) will be, or can be, made the basis for the
commencement of a second Payment Blockage Period, whether or
not within a period of 360 consecutive days, unless such
default has been cured or waived for a period of not less
than 90 consecutive days (it being acknowledged that any
subsequent action, or any breach of any financial covenant
for a period commencing after the date of commencement of
such Payment Blockage Period, that, in either case, would
give rise to a Non-payment Default pursuant to any provision
under which a Non-payment Default previously existed or was
continuing shall constitute a new Non-payment Default for
this purpose; provided that, in the case of a breach of a
particular financial covenant, the Company shall have been
in compliance for at least one full period commencing after
the date of commencement of such Payment Blockage Period).
In no event shall a Payment Blockage Period extend beyond
179 days from the date of the receipt by the Trustee of the
notice referred to in clause (2) hereof and there must be a
181 consecutive day period in any 360 day period during
which no Payment Blockage Period is in effect pursuant to
this Section 11.03(b).
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(c) In the event that, notwithstanding the fore-
going, the Trustee or the Holder of any Note shall have
received any payment or distribution prohibited by the
foregoing provisions of this Section 11.03, then and in such
event such payment or distribution shall be paid over and
delivered forthwith to the Senior Representatives or as a
court of competent jurisdiction shall direct for application
to the payment of any due and unpaid Senior Indebtedness, to
the extent necessary to pay all such due and unpaid Senior
Indebtedness in cash or cash equivalents, after giving
effect to any concurrent payment to or for the holders of
Senior Indebtedness.
Section 11.04. Trustee's Relation to Senior
Indebtedness. With respect to the holders of Senior Indebt-
edness, the Trustee undertakes to perform or to observe only
such of its covenants and obligations as are specifically
set forth in this Article Eleven (and in Article Ten with
respect to any Guarantor Senior Indebtedness), and no
implied covenants or obligations with respect to the holders
of Senior Indebtedness shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and
the Trustee shall not be liable to any holder of Senior
Indebtedness if it shall mistakenly pay over or deliver to
Holders, the Company, any Note Guarantor or any other Person
moneys or assets to which any holder of Senior Indebtedness
shall be entitled by virtue of this Article Eleven or other-
wise.
Section 11.05. Subrogation to Rights of Holders
of Senior Indebtedness. Upon the payment in full in cash or
cash equivalents of all Senior Indebtedness, the Holders of
the Notes shall be subrogated to the rights of the holders
of such Senior Indebtedness to receive payments and dis-
tributions of cash, property and securities applicable to
the Senior Indebtedness until the principal of and interest
on the Notes shall be paid in full in cash or cash equiv-
alents. For purposes of such subrogation, no payments or
distributions to the holders of Senior Indebtedness of any
cash, property or securities to which the Holders of the
Notes or the Trustee would be entitled except for the pro-
visions of this Article, and no payments over pursuant to
the provisions of this Article to the holders of Senior
Indebtedness by Holders of the Notes or the Trustee shall,
as among the Company, its creditors other than holders of
Senior Indebtedness, and the Holders of the Notes, be deemed
to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
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If any payment or distribution to which the
Holders would otherwise have been entitled but for the
provisions of this Article Eleven shall have been applied,
pursuant to the provisions of this Article Eleven, to the
payment of all amounts payable under the Senior Indebtedness
of the Company, then and in such case the Holders shall be
entitled to receive from the holders of such Senior Indebt-
edness at the time outstanding any payments or distributions
received by such holders of such Senior Indebtedness in
excess of the amount sufficient to pay all amounts payable
under or in respect of such Senior Indebtedness in full in
cash or cash equivalents.
Section 11.06. Provisions Solely to Define Rela-
tive Rights. The provisions of this Article Eleven are and
are intended solely for the purpose of defining the relative
rights of the Holders of the Notes on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing
contained in this Article Eleven or elsewhere in this Inden-
ture or in the Notes is intended to or shall (a) impair, as
among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Notes, the obli-
gation of the Company, which is absolute and unconditional,
to pay to the Holders of the Notes the principal of, pre-
mium, if any, and interest on the Notes as and when the same
shall become due and payable in accordance with their terms;
or (b) affect the relative rights against the Company of the
Holders of the Notes and creditors of the Company other than
the holders of Senior Indebtedness; or (c) prevent the
Trustee or the Holder of any Note from exercising all reme-
dies otherwise permitted by applicable law upon a Default or
an Event of Default under this Indenture, subject to the
rights, if any, under this Article Eleven of the holders of
Senior Indebtedness (1) in any case, proceeding, dis-
solution, liquidation or other winding up, assignment for
the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 11.02, to
receive, pursuant to and in accordance with such Section,
cash, property and securities otherwise payable or deliv-
erable to the Trustee or such Holder, or (2) under the
conditions specified in Section 11.03, to prevent any pay-
ment prohibited by such Section or enforce their rights
pursuant to Section 11.03(c).
The failure to make a payment on account of any
Senior Subordinated Note Obligations by reason of any pro-
vision of this Article Eleven shall not be construed as
preventing the occurrence of a Default or an Event of
Default hereunder.
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Section 11.07. Trustee to Effectuate Sub-
ordination. Each Holder of a Note by his acceptance thereof
authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate
the subordination provided in this Article Eleven and
appoints the Trustee his attorney-in-fact for any and all
such purposes, including, in the event of any dissolution,
winding-up, liquidation or reorganization of the Company
whether in bankruptcy, insolvency, receivership proceedings,
or otherwise, the timely filing of a claim for the unpaid
balance of the Indebtedness of the Company owing to such
Holder in the form required in such proceedings and the
causing of such claim to be approved. If the Trustee does
not file such a claim prior to 30 days before the expiration
of the time to file such a claim, the holders of Senior
Indebtedness, or any Senior Representative, may file such a
claim on behalf of Holders of the Notes.
Section 11.08. No Waiver of Subordination Pro-
visions. (a) No right of any present or future holder of
any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by
any such holder, or by any non-compliance by the Company
with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
(b) Without limiting the generality of subsection
(a) of this Section 11.08, the holders of Senior Indebt-
edness may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of
the Notes and without impairing or releasing the sub-
ordination provided in this Article Eleven or the obli-
gations hereunder of the Holders of the Notes to the holders
of Senior Indebtedness, do any one or more of the following:
(1) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, Senior Indebt-
edness or any instrument evidencing the same or any agree-
ment under which Senior Indebtedness is outstanding;
(2) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any Person liable in any manner
for the collection or payment of Senior Indebtedness; and
(4) exercise or refrain from exercising any rights against
the Company and any other Person; provided that in no event
shall any such actions limit the right of the Holders of the
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Notes to take any action to accelerate the maturity of the
Notes pursuant to Article Six hereof or to pursue any rights
or remedies hereunder or under applicable laws if the taking
of such action does not otherwise violate the terms of this
Indenture.
Section 11.09. Notice to Trustee. (a) The
Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the
Notes. Notwithstanding the provisions of this Article
Eleven or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any
facts which would prohibit the making of any payment to or
by the Trustee in respect of the Notes, unless and until the
Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any
trustee, fiduciary or agent therefor; and, prior to the
receipt of any such written notice, the Trustee, subject to
the provisions of this Section 11.09, shall be entitled in
all respects to assume that no such facts exist; provided
that if the Trustee shall not have received the notice
provided for in this Section 11.09 at least two Business
Days prior to the date upon which by the terms hereof any
money may become payable for any purpose under this Inden-
ture (including, without limitation, the payment of the
principal of or interest on any Note), then, anything herein
contained to the contrary notwithstanding but without limit-
ing the rights and remedies of the holders of Senior Indebt-
edness or any trustee, fiduciary or agent thereof, the
Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such
money was received and shall not be affected by any notice
to the contrary which may be received by it within two
Business Days prior to such date; nor shall the Trustee be
charged with knowledge of the curing of any such default or
the elimination of the act or condition preventing any such
payment unless and until the Trustee shall have received an
Officers' Certificate to such effect.
(b) Subject to the provisions of Section 7.01,
the Trustee shall be entitled to rely on the delivery to it
of a written notice to the Trustee by a Person representing
himself to be a holder of Senior Indebtedness (or a
representative, trustee, fiduciary or agent therefor) to
establish that such notice has been given by a holder of
Senior Indebtedness (or a representative, trustee, fiduciary
or agent therefor). In the event that the Trustee deter-
mines in good faith that further evidence is required with
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respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution
pursuant to this Article Eleven, the Trustee may request
such Person to furnish evidence to the reasonable satis-
faction of the Trustee as to the amount of Senior Indebted-
ness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under
this Article Eleven, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to
receive such payment.
Section 11.10. Reliance on Judicial Order or
Certificate of Liquidating Agent. Upon any payment or
distribution of assets of the Company referred to in this
Article Eleven, the Trustee, subject to the provisions of
Section 7.01, and the Holders, shall be entitled to rely
upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receiv-
ership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate
of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered
to the Trustee or to the Holders, for the purpose of ascer-
taining the Persons entitled to participate in such payment
or distribution, the holders of Senior Indebtedness and
other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this
Article; provided that the foregoing shall apply only if
such court has been fully apprised of the provisions of this
Article Eleven. The Trustee is not responsible for
determining whether or not the court has been fully apprised
of the provisions of this Article Eleven.
Section 11.11. Rights of Trustee as a Holder of
Senior Indebtedness; Preservation of Trustee's Rights. The
Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article Eleven with respect to
any Senior Indebtedness which may at any time be held by it,
to the same extent as any other holder of Senior Indebt-
edness, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder. Nothing in
this Article Eleven shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.08.
126
<PAGE>
Section 11.12. Article Applicable to Paying
Agents. In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as
if such Paying Agent were named in this Article Eleven in
addition to or in place of the Trustee; provided that Sec-
tion 11.11 shall not apply to the Company or any Affiliate
of the Company if it or such Affiliate acts as Paying Agent.
Section 11.13. No Suspension of Remedies. Noth-
ing contained in this Article Eleven shall limit the right
of the Trustee or the Holders of Notes to take any action to
accelerate the maturity of the Notes pursuant to Article Six
or to pursue any rights or remedies hereunder or under
applicable law, subject to the rights, if any, under this
Article Eleven of the holders, from time to time, of Senior
Indebtedness.
ARTICLE TWELVE
MISCELLANEOUS
Section 12.01. Trust Indenture Act of 1939. This
Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the
extent applicable, be governed by such provisions.
If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or
excluded, as the case may be.
Section 12.02. Notices. Any notice or com-
munication shall be sufficiently given if in writing and
delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
127
<PAGE>
If to the Company or any Note Guarantor to:
Mettler-Toledo, Inc.
Im Langacher
P.O. Box MT-100
CH-8606
Greifensee, Switzerland
Attention: Chief Executive Officer
With a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Timothy E. Peterson
If to the Trustee to:
United States Trust Company of
New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Division
The parties hereto by notice to the other parties
may designate additional or different addresses for sub-
sequent notices or communications.
Any notice or communication mailed, postage pre-
paid, to a Holder, including any notice delivered in con
nection with TIA Section 310(b), TIA Section 313(c), TIA
Section 314(a) and TIA Section 315(b), shall be mailed by
first class mail to such Holder at the address of such
Holder as it appears on the Notes register maintained by the
Registrar and shall be sufficiently given to such Holder if
so mailed within the time prescribed. Copies of any such
communication or notice to a Holder shall also be mailed to
the Trustee.
Failure to mail a notice or communication to a
Noteholder or any defect in it shall not affect its suf-
ficiency with respect to other Holders. Except for a notice
to the Trustee, which is deemed given only when received, if
a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee
receives it.
Section 12.03. Communication by Holders with
Other Holders. Holders may communicate pursuant to TIA
128
<PAGE>
Section 312(b) with other Holders with respect to their
rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
Section 12.04. Certificate and Opinion as to
Conditions Precedent. Upon any request or application by
the Company to the Trustee to take or refrain from taking
any action under this Indenture, the Company shall furnish
to the Trustee:
(1) an Officers' Certificate in form and
substance reasonably satisfactory to the Trustee
stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel in form and substance
satisfactory to the Trustee stating that, in the
opinion of such counsel, all such conditions precedent
have been complied with.
Section 12.05. Statements Required in Certificate
or Opinion. Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(1) a statement that the Person making such cer-
tificate or opinion has read such covenant or con-
dition;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(3) a statement that, in the opinion of such
Person, he has made such examination or investigation
as is reasonably necessary to enable him to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the
opinion of such Person, such condition or covenant has
been complied with; provided that with respect to
matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public offi-
cials.
129
<PAGE>
Section 12.06. Rules by Trustee, Paying Agent,
Registrar. The Trustee may make reasonable rules for action
by or at a meeting of Noteholders. The Paying Agent or
Registrar may make reasonable rules for its functions.
Section 12.07. Legal Holiday. "Legal Holiday" is
a Saturday, a Sunday or a day on which banking institutions
are not required to be open in the State of New York. If a
payment date is a Legal Holiday, payment shall be made on
the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If a
regular record date is a Legal Holiday, the record date
shall not be affected.
Section 12.08. Governing Law. THIS INDENTURE AND
THE NOTES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF.
Section 12.09. No Recourse Against Others. No
director, officer, employee, incorporator or stockholder, as
such, of the Company, Holding, any Note Guarantor or any
Subsidiary of the foregoing shall have any liability for any
obligations of the Company under the Notes or this Indenture
or of a Note Guarantor under any Note Guarantee or for any
claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability.
Section 12.10. Successors. All agreements of the
Company and Holding in this Indenture, the Notes and the
Note Guarantee of Holding shall bind their successors. All
agreements of the Trustee in this Indenture shall bind its
successors.
Section 12.11. Multiple Originals. The parties
may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all such executed
copies together represent the same agreement. One signed
copy is enough to prove this Indenture.
Section 12.12. Separability. In case any pro-
vision in this Indenture, the Notes or any Note Guarantee
shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
Section 12.13. Table of Contents, Headings, etc.
The table of contents, cross-reference table and headings of
130
<PAGE>
the Articles and Sections of this Indenture have been
inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 12.14. Benefits of Indenture. Nothing in
this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their
successors hereunder, and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Inden-
ture except to holders of Senior Indebtedness and Guarantor
Senior Indebtedness.
131
<PAGE>
This Indenture may be signed in any number of
counterparts with the same effect as if the signatures to
each counterpart were upon a single instrument, and all such
counterparts together shall be deemed an original of this
Indenture.
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year
first above written.
MT ACQUISITION CORP.
By:___________________________________
Name:
Title:
METTLER-TOLEDO HOLDING INC.
By:___________________________________
Name:
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By:___________________________________
Name:
Title:
132
<PAGE>
SCHEDULE 1
Existing Liens
[to come]
<PAGE>
EXHIBIT A
MT ACQUISITION CORP.
(to be assumed by Mettler-Toledo, Inc.)
% Senior Subordinated Note due 2006
UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE
COMPANY OR THEIR AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.
CUSIP No.
No. $115,000,000
MT ACQUISITION CORP., a corporation incorporated
under the laws of the State of Delaware (herein called the
"Company," which term includes any successor corporation
under this Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________ or
registered assigns, the principal sum of $115,000,000 on
, 2006, at the office or agency of the Company
referred to below, and to pay interest thereon on
and , in each year, commencing on ,
1996, accruing from , 1996 or from the most recent
Interest Payment Date to which interest has been paid or
duly provided for, at the rate of % per annum, until the
principal hereof is paid or duly provided for. Interest
shall be computed on the basis of a 360-day year comprised
of twelve 30-day months.
The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as
provided in this Indenture referred to on the reverse
A-1
<PAGE>
hereof, be paid to the Person in whose name this Note (or
one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest, which
shall be or (whether or not a Business
Day), as the case may be, next preceding such Interest
Payment Date (each a "Regular Record Date"). Any such
interest not so punctually paid, or duly provided for, and
interest on such defaulted interest at the rate borne by the
Notes, to the extent lawful, shall forthwith cease to be
payable to the Holder on such Regular Record Date, and may
be paid to the Person in whose name this Note (or one or
more Predecessor Notes) is registered at the close of
business on a special record date for the payment of such
defaulted interest to be fixed by the Trustee, notice of
which shall be given to Holders of Notes not less than 10
days prior to such special record date, or may be paid at
any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in such
Indenture.
Payment of the principal of and interest on this
Note will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan in
The City of New York, or at such other office or agency of
the Company as may be maintained for such purpose, in such
coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and
private debts; provided that payment of interest may be made
at the option of the Company by check mailed to the address
of the Person entitled thereto as such address shall appear
on the Note register maintained by the Registrar.
Reference is hereby made to the further provisions
of this Note set forth on the reverse hereof.
Unless the certificate of authentication hereon
has been duly executed by the Trustee referred to on the
reverse hereof by manual signature, and a seal has been
affixed hereon, this Note shall not be entitled to any
benefit under this Indenture, or be valid or obligatory for
any purpose.
A-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated: October , 1996 MT ACQUISITION CORP.
By:___________________________________
Name:
Title:
[SEAL]
By:___________________________________
Name:
Title:
A-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the
within-mentioned Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By:___________________________________
Authorized Signatory
A-4
<PAGE>
(Reverse of Note)
1. Indenture. This Note is one of a duly autho-
rized issue of Notes of the Company designated as its %
Senior Subordinated Notes due 2006, limited (except as
otherwise provided in this Indenture referred to below) in
aggregate principal amount to $115,000,000, which may be
issued under an indenture (herein called the "Indenture")
dated as of October , 1996, between MT Acquisition Corp.,
a Delaware corporation, as issuer (together with its
successors, the "Company"), Mettler-Toledo Holding Inc., a
Delaware corporation, as a Note Guarantor and United States
Trust Company of New York, as trustee (the "Trustee," which
term includes any successor Trustee under this Indenture),
to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and
immunities thereunder of the Company, any Note Guarantor,
the Trustee and the Holders of the Notes, and of the terms
upon which the Notes are, and are to be, authenticated and
delivered.
All terms used in this Note which are defined in
the Indenture and not otherwise defined herein shall have
the meanings assigned to them in the Indenture.
No reference herein to the Indenture and no pro-
visions of this Note or of this Indenture shall alter or
impair the absolute or unconditional obligation of the
Company and any Note Guarantor to pay the principal of,
premium, if any and interest on this Note at the times,
place, and rate, and in the coin or currency, herein
prescribed.
2. Note Guarantees. This Note is entitled to a
certain senior subordinated Note Guarantee made for the
benefit of the Holders. Reference is hereby made to Article
Ten of this Indenture for terms relating to the Note
Guarantee.
3. Subordination. The Indebtedness evidenced by
the Notes is, to the extent and in the manner provided in
this Indenture, subordinate and subject in right of payment
to the prior payment in full in cash or cash equivalents of
all Senior Indebtedness and Guarantor Senior Indebtedness,
as defined in this Indenture, and this Note is issued
subject to such provisions. Each Holder of this Note, by
accepting the same, (a) agrees to and shall be bound by such
A-5
<PAGE>
provisions, (b) authorizes and directs the Trustee, on
behalf of such Holder, to take such action as may be
necessary or appropriate to effectuate the subordination as
provided in this Indenture and (c) appoints the Trustee
attorney-in-fact of such Holder for such purpose; provided
that the Indebtedness evidenced by this Note shall cease to
be so subordinate and subject in right of payment upon any
defeasance of this Note referred to in Paragraph 8 below.
4. Redemption.
(a) Optional Redemption. The Notes are subject
to redemption, at the option of the Company, as a whole or
in part, in principal amounts of $1,000 or any integral
multiple of $1,000, at any time on or after , 2001
upon not less than 30 nor more than 60 days' prior notice at
the following Redemption Prices (expressed as percentages of
the principal amount) if redeemed during the 12-month period
beginning on of the years indicated below:
<TABLE>
<CAPTION>
Redemption
Year Price
- -------------------------------------- ------------------------------
<S> <C>
2001............................................................................. %
2002............................................................................. %
2003............................................................................. %
2004 and thereafter.............................................................. 100%
</TABLE>
plus accrued and unpaid interest, if any, to the Redemption
Date, all as provided in this Indenture.
(b) Optional Redemption Upon Public Equity Offer-
ing. In addition, at any time and from time to time on or
prior to , 1999, the Company may redeem in the
aggregate up to $40,000,000 of the original amount of the
Notes with the proceeds of one or more Public Equity
Offerings, in each case which yields gross proceeds to the
Company (before discounts, commissions and expenses) of at
least $65,000,000 and following which there is a Public
Market, at a redemption price equal to __% of the principal
amount thereof plus accrued and unpaid interest, if any, to
the Redemption Date; provided that not less than $75,000,000
in aggregate principal amount of Notes must remain
outstanding following such redemption. In order to effect
the foregoing redemption with the proceeds of a Public
Equity Offering, the redemption must be made within 60 days
A-6
<PAGE>
of the date of the consummation of any such Public Equity
Offering.
(c) Interest Payments. In the case of any
redemption of Notes, interest installments whose Stated
Maturity is on or prior to the Redemption Date will be
payable to the Holders of such Notes, or one or more Pre-
decessor Notes, of record at the close of business on the
relevant Record Date referred to on the face hereof. Notes
(or portions thereof) for whose redemption and payment
provision is made in accordance with this Indenture shall
cease to bear interest from and after the Redemption Date.
(d) Partial Redemption. In the event of redemp-
tion of this Note in part only, a new Note or Notes for the
unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
5. Offers to Purchase. Sections 4.18 and 4.19 of
the Indenture provide that following any Asset Sale and,
upon the occurrence of a Change of Control, and subject to
further limitations contained therein, the Company shall
make an offer to purchase certain amounts of the Notes in
accordance with the procedures set forth in this Indenture.
6. Defaults and Remedies. If an Event of Default
shall occur and be continuing, the principal of all of the
outstanding Notes, plus all accrued and unpaid interest, if
any, to and including the date the Notes are paid, may be
declared due and payable in the manner and with the effect
provided in this Indenture.
7. Defeasance. The Indenture contains provisions
(which provisions apply to this Note) for defeasance at any
time of (a) the entire indebtedness on this Note and (b)
certain restrictive covenants and related Defaults and
Events of Default, in each case upon compliance by the
Company with certain conditions set forth therein.
8. Amendments and Waivers. The Indenture per-
mits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders
under this Indenture at any time by the Company, any Note
Guarantor and the Trustee with the consent of the Holders of
not less than a majority in aggregate principal amount of
the Notes at the time outstanding. The Indenture also
contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Notes at
A-7
<PAGE>
the time outstanding, on behalf of the Holders of all the
Notes, to waive compliance by the Company and any Note
Guarantor with certain provisions of this Indenture and
certain past Defaults under this Indenture and this Note and
their consequences. Any such consent or waiver by or on
behalf of the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent or waiver is made
upon this Note.
9. Denominations, Transfer and Exchange. The
Notes are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple there-
of. As provided in this Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable
for a like aggregate principal amount of Notes of a dif-
ferent authorized denomination, as requested by the Holder
surrendering the same.
As provided in this Indenture and subject to cer-
tain limitations therein set forth, the transfer of this
Note is registrable on the Note register of the Company,
upon surrender of this Note for registration of transfer at
the office or agency of the Company maintained for such
purpose in the Borough of Manhattan in The City of New York
or at such other office or agency of the Company as may be
maintained for such purpose, duly endorsed by, or accom-
panied by a written instrument of transfer in form satis-
factory to the Company and the Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writ-
ing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
No service charge shall be made for any regis-
tration of transfer or exchange or redemption of Notes, but
the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection
therewith.
10. Persons Deemed Owners. Prior to and at the
time of due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all pur-
poses, whether or not this Note shall be overdue, and
A-8
<PAGE>
neither the Company, the Trustee nor any agent shall be
affected by notice to the contrary.
11. Governing Law. THIS NOTE SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
12. Selection and Notice. In the event that less
than all of the Notes are to be redeemed at any time, selec-
tion of such Notes for redemption will be made by the
Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are
listed or, if the Notes are not then listed on a national
securities exchange, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate;
provided that no Notes of an original principal amount of
$1,000 or less shall be redeemed in part. Notice of redemp-
tion shall be mailed by first-class mail at least 30 but not
more than 60 days before the redemption date to each Holder
of Notes to be redeemed at its registered address. If any
Note is to be redeemed in part only, the notice of redemp-
tion that relates to such Note shall state the portion of
the principal amount thereof to be redeemed. A new Note in
a principal amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon sur-
render for cancellation of the original Note. On and after
the redemption date, interest will cease to accrue on Notes
or portions thereof called for redemption and accepted for
payment.
13. Abbreviations. The following abbreviations,
when used in the inscription on the face of this Note, shall be
construed as though they were written out in full according to
applicable laws or regulations:
(i) TEN COM - as tenants in common;
(ii) TEN ENT - as tenants by the entireties;
(iii) JT TEN - as joint tenants with right of
survivorship and not as tenants in common;
(iv) UNIF GIFT MIN ACT - Custodian
------- -------
(Cust.) (Minor)
Under Uniform Gifts to Minors Act
-----------------
(State)
Additional abbreviations may also be used though not in the above list.
A-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the
Company pursuant to Section 4.18 or 4.19 of the Indenture,
check the appropriate box:
Section 4.18 [ ]
Section 4.19 [ ]
If you wish to have a portion of this Note pur-
chased by the Company pursuant to Section 4.18 or 4.19 of
the Indenture, state the amount:
$______________
Date: __________________ Your Signature: _________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee: ______________________
A-10
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and
irrevocably appoint
- --------------------------------------------------------------------------------
agent to transfer this Note on the books of the Company.
The agent may substitute another to act for him.
- --------------------------------------------------------------------------------
Date: __________________ Your Signature: _________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:______________________________
A-11
<PAGE>
SENIOR SUBORDINATED NOTE GUARANTEE
For value received, the undersigned hereby
absolutely, unconditionally and irrevocably guarantees, as a
primary obligor and not merely as a surety, to the Holder of
this Note the payments of principal of, premium, if any, and
interest on this Note as set forth in Article Ten of the
Indenture. This Note Guarantee is subject to release upon
the terms set forth in the Indenture.
METTLER-TOLEDO HOLDING INC.
By:_______________________________
Name:
Title:
A-12
<PAGE>
EXHIBIT B
FORM OF FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of October
, 1996 (this "Supplemental Indenture"), among METTLER-
TOLEDO, INC., a corporation incorporated under the laws of
the State of Delaware (the "Company"), METTLER-TOLEDO
HOLDING INC., a corporation incorporated under the laws of
the State of Delaware (the "Note Guarantor"), and UNITED
STATES TRUST COMPANY OF NEW YORK, as trustee under the
indenture referred to below (the "Trustee").
WITNESSETH:
WHEREAS the corporation formerly named MT
Acquisition Corp. ("MT Acquisition"), the Note Guarantor and
the Trustee have heretofore executed and delivered an
indenture, dated as of the date hereof (as amended, the
"Indenture"), providing for the issuance of an aggregate
principal amount of $115,000,000 of % Senior Subordinated
Notes due 2006 of the Company (the "Notes");
WHEREAS immediately after the execution of the
Indenture and the issuance of the Notes, MT Acquisition was
merged with and into the Company in the Merger, with the
Company as the surviving corporation; and
WHEREAS, pursuant to Sections 5.01 and 9.01 of the
Indenture, the Company, the Note Guarantor and the Trustee
are authorized to execute and deliver this Supplemental
Indenture;
NOW, THEREFORE, each party hereto agrees as
follows for the benefit of each other party and for the
equal and ratable benefit of the Holders of the Notes as
follows:
1. Definitions. Capitalized terms used herein
without definition shall have the meanings assigned to them
in the Indenture. For all purposes of this Supplemental
Indenture, except as otherwise expressly provided or unless
the context otherwise requires: (i) the terms and
expressions used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture;
and (ii) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Supplemental
Indenture as a whole and not to any particular section or
other subdivision hereof.
B-1
<PAGE>
2. Express Assumption. The Company hereby
acknowledges and agrees that as a result of it being the
surviving corporation in the Merger with MT Acquisition it
has succeeded to all the obligations of MT Acquisition under
the Notes and the Indenture. The Company hereby expressly
assumes all the obligations of MT Acquisition under the
Notes and the Indenture.
3. Ratification of Indenture; Supplemental
Indenture Part of Indenture. Except as expressly amended
hereby, the Indenture is in all respects ratified and
confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture
for all purposes, and every Holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby.
4. Governing Law. THIS SUPPLEMENTAL INDENTURE
AND THE NOTES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAW THEREOF.
5. Trustee Makes No Representation. The Trustee
makes no representation as to the validity or sufficiency of
this Supplemental Indenture.
6. Multiple Originals. The parties may sign any
number of copies of this Supplemental Indenture. Each
signed copy shall be an original, but all such executed
copies together represent the same agreement. One signed
copy is enough to prove this Indenture.
7. Effect of Headings. The Section headings of
this Supplemental Indenture have been inserted for
convenience of reference only, are not to be considered a
part hereof, and shall in no way modify or restrict any of
the terms or provisions thereof.
B-2
<PAGE>
This Supplemental Indenture may be signed in any
number of counterparts with the same effect as if the
signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be
deemed an original of this Supplemental Indenture.
IN WITNESS WHEREOF, the parties hereto have caused
this Supplemental Indenture to be duly executed as of the
day and year first above written.
METTLER-TOLEDO, INC.
By:_______________________________
Name:
Title:
METTLER-TOLEDO HOLDING INC.
By:_______________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee,
By:_______________________________
Name:
Title:
B-3
212-859-8212
October 1, 1996 (FAX: 212-859-8586)
MT Acquisition Corp.
Mettler-Toledo Holding Inc.
Im Langacher P.O. Box MT-100
CH 8606 Greifensee, Switzerland
RE: Registration Statement - No. 333-09621
Ladies and Gentlemen:
We are acting as special counsel to MT Acquisition
Corp. (the "Company") and Mettler Toledo Holding Inc. ("Holding")
(together, the "Registrants"), in connection with the Registration
Statement on Form S-1 (No. 333-09621) (as amended, the "Registration
Statement") filed with the Securities and Exchange Commission (the
"Commission"), relating to the underwritten public offering of Senior
Subordinated Notes due 2006 (the "Notes") of the Company, which will
be guaranteed by Holding (the "Guarantee"). Capitalized terms used but
not defined herein shall have the meanings ascribed to them in the
Registration Statement.
In connection with this opinion, we have (i)
investigated such questions of law, (ii) examined originals or
certified, conformed or reproduction copies of such agreements,
instruments, documents and records of the Registrants and their
respective subsidiaries, such certificates of public officials and
such other documents, and (iii) reviewed such information from
officers and representatives of the Registrants and their respective
subsidiaries and others, in each case, as we have deemed necessary or
appropriate for the purposes of this opinion.
In all such examinations, we have assumed the legal
capacity of all natural persons executing documents, the genuineness
of all signatures on original or certified copies, the authenticity of
all original or certified copies and the conformity to original or
certified documents of all copies submitted to us as conformed or
reproduction copies. As to various questions of fact relevant to the
opinions expressed herein, we have relied upon, and assume the
accuracy of, the statements made in the certificates of an officer of
each of the Registrants
<PAGE>
MT Acquisition Corp.
Mettler-Toledo Holding Inc. - 2 - October 1, 1996
delivered to us, and certificates and oral or written statements and other
information of or from public officials and officers and representatives of the
Registrants, their respective subsidiaries and others.
We have assumed, for purposes of the opinions
expressed herein, that (i) the Trustee has the power and authority to
enter into and perform the Indenture and (ii) the Indenture has been
duly authorized, executed and delivered by the Trustee and is valid,
binding and enforceable upon the Trustee.
Based upon the foregoing and subject to the
limitations, qualifications and assumptions set forth herein, we are
of the opinion that, when (i) the Registration Statement has become
effective under the Securities Act of 1933, as amended, (ii) the terms
of the Notes and their issue and sale have been duly established as
authorized and in conformity with the Indenture pursuant to which the
Notes are to be issued so as not to violate any applicable law or
agreement or instrument then binding on the Company and Holding, and
(iii) the Notes have been duly executed and authenticated in
accordance with the terms of the Indenture and delivered and paid for
as contemplated by the Registration Statement, the Notes and the
Guarantee will constitute the valid and binding obligations of the
Company and Holding, respectively.
This opinion is limited to the General Corporation
Law of the State of Delaware and the laws of the State of New York, as
currently in effect.
The opinion expressed above is subject to the
qualification that the enforceability of the Notes and the Guarantee
against the Company and Holding, respectively, (i) may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, fraudulent
conveyance, reorganization, moratorium and other laws now or hereafter
in effect affecting creditors' rights generally and (ii) is subject to
the general principles of equity (including, without limitation,
standards of materiality, good faith, fair dealing and
reasonableness), whether such principles are considered in a
proceeding in equity or at law.
We hereby consent to the filing of this opinion as
an exhibit to the Registration Statement and to the reference to this
firm under the caption "Legal Matters" in the Prospectus forming part
of the Registration Statement. In giving such consent, we do not
thereby admit that we are in the category of such persons whose
consent is required under Section 7 of the Securities Act of 1933, as
amended.
<PAGE>
MT Acquisition Corp.
Mettler-Toledo Holding Inc. - 3 - October 1, 1996
The opinions expressed herein are solely for your
benefit and may not be relied upon in any manner or for any purpose
except as specifically provided for herein.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
By: ______________________________________
Timothy E. Peterson
<PAGE>
================================================================================
CREDIT AGREEMENT
Dated as of October [ ], 1996
among
METTLER-TOLEDO HOLDING INC.,
as Guarantor,
MT ACQUISITION CORP.
(to be merged into Mettler-Toledo, Inc.)
and
METTLER-TOLEDO HOLDING AG,
as Borrowers,
THE SUBSIDIARY SWING LINE BORROWERS NAMED HEREIN,
MERRILL LYNCH & CO.,
as Arranger and Documentation Agent,
THE BANK OF NOVA SCOTIA,
as Administrative Agent,
CREDIT SUISSE
and LEHMAN COMMERCIAL PAPER INC.,
as Co-Agents,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
================================================================================
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms............................................ 2
1.2 Other Interpretive Provisions.................................... 42
1.3 Accounting Principles............................................ 43
1.4 Currency Equivalents Generally................................... 43
1.5 Principle of Deemed Reinvestment................................. 44
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments................................. 44
2.2 Notes............................................................ 45
2.3 Procedure for Committed Borrowings............................... 46
2.4 Conversion and Continuation Elections for Committed Borrowings... 47
2.5 Utilization of Commitments in Offshore Currencies................ 49
2.6 Reduction or Termination of Commitments.......................... 52
2.7 Prepayments...................................................... 53
2.8 Currency Exchange Fluctuations................................... 57
2.9 Repayment........................................................ 58
2.10 Interest......................................................... 58
2.11 Fees............................................................. 59
(a) Arrangement, Agency Fees..................................... 59
(b) Facility Fees................................................ 60
2.12 Computation of Fees and Interest................................. 60
2.13 Payments by the Borrowers........................................ 60
2.14 Payments by the Lenders to the Administrative Agent.............. 61
2.15 Adjustments...................................................... 62
2.16 Swing Line Commitment............................................ 63
2.17 Borrowing Procedures for Swing Line Loans........................ 63
2.18 Refunding of Swing Line Loans.................................... 64
2.19 Participations in Swing Line Loans............................... 65
2.20 Swing Line Participation Obligations Unconditional............... 65
2.21 Conditions to Swing Line Loans................................... 66
-i-
<PAGE>
Section Page
- ------- ----
ARTICLE III
THE LETTERS OF CREDIT
3.1 The Letter of Credit Subfacility................................. 66
3.2 Issuance, Amendment and Renewal of Letters of Credit............. 68
3.3 Risk Participations, Drawings and Reimbursements................. 70
3.4 Repayment of Participations...................................... 72
3.5 Role of the L/C Lender........................................... 73
3.6 Obligations Absolute............................................. 73
3.7 Cash Collateral Pledge........................................... 74
3.8 Letter of Credit Fees............................................ 74
3.9 Uniform Customs and Practice..................................... 75
3.10 Letters of Credit for the Account of Subsidiaries................ 75
ARTICLE IV
NET PAYMENTS, YIELD PROTECTION AND ILLEGALITY
4.1 Net Payments..................................................... 75
4.2 Illegality....................................................... 79
4.3 Increased Costs and Reduction of Return.......................... 80
4.4 Funding Losses................................................... 81
4.5 Inability to Determine Rates..................................... 82
4.6 Reserves on Offshore Rate Committed Loans........................ 83
4.7 Certificates of Lenders.......................................... 83
4.8 Substitution of Lenders.......................................... 83
4.9 Right of Lenders to Fund Through Branches and Affiliates......... 84
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions of Initial Loans...................................... 84
(a) Credit Agreement; Guarantees; Notes.......................... 84
(b) Transactions................................................. 85
(c) Transaction Documents........................................ 85
(d) Opinions of Counsel.......................................... 85
(e) Corporate Documents.......................................... 86
(f) Adverse Change, etc.......................................... 86
(g) Litigation................................................... 86
(h) Approvals.................................................... 87
(i) Security Documents........................................... 87
-ii-
<PAGE>
Section Page
- ------- ----
(j) Conditions Relating to Mortgaged Real Property and Real
Property................................................... 88
(k) Solvency Opinion; Environmental Analyses; Evidence of
Insurance; Financial Statements............................ 90
(l) Pro Forma Balance Sheet...................................... 91
(m) Payment of Fees.............................................. 91
(n) Other Matters................................................ 91
(o) Certificate.................................................. 91
(p) Debt to Be Repaid............................................ 92
5.2 Conditions to All Credit Extensions.............................. 92
(a) Notice, Application.......................................... 92
(b) Continuation of Representations and Warranties............... 92
(c) No Existing Default; No Legal Bar ........................... 92
5.3 Delivery of Documents............................................ 93
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Corporate Status................................................. 93
6.2 Authority........................................................ 93
6.3 No Conflicts; Consents........................................... 94
6.4 Binding Effect................................................... 94
6.5 Litigation....................................................... 94
6.6 No Default....................................................... 95
6.7 Benefit Plans.................................................... 95
6.8 Use of Proceeds; Margin Regulations.............................. 96
6.9 Financial Condition; Financial Statements; etc................... 96
6.10 Properties....................................................... 97
6.11 Taxes............................................................ 97
6.12 Environmental Matters............................................ 98
6.13 Regulated Entities............................................... 100
6.14 Employee and Labor Matters....................................... 100
6.15 Intellectual Property............................................ 101
6.16 Subsidiaries..................................................... 101
6.17 Existing Indebtedness............................................ 101
6.18 True and Complete Disclosure..................................... 101
6.19 Security Interests............................................... 102
6.20 Representations and Warranties in Basic Documents................ 103
6.21 M-T Acquisition.................................................. 103
6.22 Broker's Fees.................................................... 103
6.23 Senior Subordinated Notes........................................ 103
-iii-
<PAGE>
Section Page
- ------- ----
ARTICLE VII
AFFIRMATIVE COVENANTS
7.1 Financial Statements, etc........................................ 104
7.2 Certificates; Other Information.................................. 105
7.3 Notices.......................................................... 106
7.4 Preservation of Corporate Existence, etc......................... 107
7.5 Maintenance of Property; Insurance............................... 108
7.6 Payment of Obligations........................................... 108
7.7 Compliance with Environmental Laws............................... 108
7.8 Compliance with ERISA............................................ 109
7.9 Inspection of Property and Books and Records..................... 109
7.10 End of Fiscal Years; Fiscal Quarters............................. 110
7.11 Use of Proceeds.................................................. 110
7.12 Further Assurances............................................... 110
7.13 Equal Security for Loans and Notes; No Further Negative Pledges.. 111
7.14 Pledge of Additional Collateral.................................. 111
7.15 Security Interests............................................... 112
7.16 Interest Rate Protection......................................... 113
7.17 Currency and Commodity Hedging Transactions...................... 113
7.18 Foreign Subsidiaries Security.................................... 113
7.19 Register......................................................... 114
7.20 New Subsidiaries................................................. 115
7.21 Assumption by Mettler-Toledo, Inc................................ 115
7.22 Subsidiaries to Enter into Loan Documents Post-Closing........... 115
ARTICLE VIII
NEGATIVE COVENANTS
8.1 Limitation on Liens.............................................. 116
8.2 Consolidations, Mergers and Disposition of Assets................ 119
8.3 Leases........................................................... 121
8.4 Loans and Investments............................................ 122
8.5 Limitation on Indebtedness....................................... 126
8.6 Transactions with Affiliates..................................... 128
8.7 Use of Proceeds.................................................. 129
8.8 Contingent Obligations........................................... 129
8.9 Restrictions on Subsidiaries..................................... 131
8.10 Fixed Charge Coverage Ratio...................................... 131
8.11 Minimum Net Worth................................................ 132
8.12 Debt to EBITDA Ratio............................................. 133
-iv-
<PAGE>
Section Page
- ------- ----
8.13 Restricted Payments.............................................. 133
8.14 ERISA............................................................ 135
8.15 Change in Business............................................... 135
8.16 Accounting Changes............................................... 135
8.17 Prepayments of Senior Subordinated Notes, etc.................... 135
8.18 Amendments to Other Documents.................................... 136
8.19 Capital Expenditures............................................. 136
8.20 Sale and Lease-Backs............................................. 136
8.21 Sale or Discount of Receivables.................................. 137
8.22 Creation of Subsidiaries......................................... 137
8.23 Designated Senior Debt........................................... 138
8.24 Issuance or Disposal of Subsidiary Stock......................... 138
8.25 Limitation on Other Restrictions on Amendment of Basic Documents. 138
ARTICLE IX
EVENTS OF DEFAULT
9.1 Event of Default................................................. 139
(a) Non-Payment.................................................. 139
(b) Representation or Warranty................................... 139
(c) Specific Defaults............................................ 139
(d) Other Defaults............................................... 139
(e) Cross-Default................................................ 139
(f) Insolvency; Voluntary Proceedings............................ 140
(g) Involuntary Proceedings...................................... 140
(h) ERISA........................................................ 140
(i) Monetary Judgments........................................... 140
(j) Non-Monetary Judgments....................................... 141
(k) Guarantees................................................... 141
(l) Security Documents........................................... 141
(m) Change of Control............................................ 141
(n) Senior Subordinated Notes.................................... 141
(o) Ciba Reimbursement Agreement................................. 141
9.2 Remedies......................................................... 141
9.3 Rights Not Exclusive............................................. 142
-v-
<PAGE>
Section Page
- ------- ----
ARTICLE X
THE AGENTS
10.1 Appointment and Authorization.................................... 143
10.2 Delegation of Duties............................................. 144
10.3 Exculpatory Provisions........................................... 144
10.4 Reliance by Administrative Agent................................. 144
10.5 Notice of Default................................................ 145
10.6 Credit Decision.................................................. 145
10.7 Indemnification ................................................. 146
10.8 Administrative Agent in Individual Capacity...................... 147
10.9 Successor Administrative Agent................................... 147
10.10 Holders.......................................................... 148
10.11 Failure to Act................................................... 148
ARTICLE XI
MISCELLANEOUS
11.1 Amendments and Waivers........................................... 148
11.2 Notices.......................................................... 150
11.3 No Waiver; Cumulative Remedies................................... 151
11.4 Expenses, Indemnity, etc......................................... 151
11.5 Payments Pro Rata................................................ 154
11.6 Payments Set Aside............................................... 154
11.7 Successors and Assigns........................................... 154
11.8 Assignments and Participations, etc.............................. 154
11.9 Confidentiality.................................................. 157
11.10 Set-off.......................................................... 158
11.11 Notification of Addresses, Lending Offices, etc.................. 158
11.12 Counterparts..................................................... 158
11.13 Severability; Modification to Conform to Law..................... 159
11.14 No Third Parties Benefitted...................................... 159
11.15 Governing Law; Submission to Jurisdiction; Venue................. 159
11.16 Waiver of Jury Trial............................................. 160
11.17 Judgment......................................................... 160
11.18 Prior Understandings............................................. 160
11.19 Survival......................................................... 161
-vi-
<PAGE>
SCHEDULES
- ---------
Schedule 1.1[ ] Ciba Loan Documents
Schedule 1.1[ ] M-T Acquisition Documents
Schedule 1.1[ ] Mortgaged Properties
Schedule 1.1[ ] Non-Guarantor Subsidiaries
Schedule 2.1 Commitments and Pro Rata Shares
Schedule 2.9(a) Scheduled Tranche B Term Loan Installment Payments and
Scheduled Tranche C(CH) Installment Payments
Schedule 2.9(b) Scheduled Tranche A-1 Term Loan Installment Payments,
Scheduled Tranche A-2 Term Loan Installment Payments,
Scheduled Tranche C(US) Term Loan Installment Payments and
Scheduled Tranche D Term Loan Installment Payments
Schedule 5.1(p) Debt to be Repaid
Schedule 6.5 Litigation
Schedule 6.12 Environmental Matters
Schedule 6.15 Intellectual Property
Schedule 6.16 Subsidiaries and Minority Interests
Schedule 6.17 Existing Indebtedness
Schedule 6.21 Certain Consents
Schedule 6.22 Broker's Fees
Schedule 7.22 Subsidiaries to Enter into Loan Documents Post-Closing
Schedule 8.1 Certain Existing Liens
Schedule 8.2(i) Certain Asset Sales
Schedule 8.4(j) Investments Made in Connection with the M-T Acquisition
Schedule 8.4(o) Existing Investments and Investments to be Made Under Binding
Agreements
Schedule 8.6 Existing Affiliate Agreements
Schedule 8.8 Contingent Obligations
Schedule 11.2 Offshore and Domestic Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Committed Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Security Agreement
Exhibit E-1 Form of CH Borrower Guarantee
Exhibit E-2 Form of Domestic Subsidiary Guarantee
Exhibit E-3 Form of Foreign Subsidiary Guarantee
Exhibit E-4 Form of Holding Guarantee
Exhibit E-5 Form of Holding Guarantee
Exhibit F-1 Form of Opinion of Fried, Frank, Harris, Shriver & Jacobson
-vii-
<PAGE>
Exhibit F-2 Form of Local Counsel Opinion to the Foreign Loan Parties
Exhibit F-3 Form of Local Counsel Opinion to the Domestic Loan Parties
Exhibit G Form of Assignment and Acceptance
Exhibit H-1 Form of Tranche A-1 Term Note
Exhibit H-2 Form of Tranche A-2 Term Note
Exhibit H-3 Form of Tranche B Term Note
Exhibit H-4 Form of Tranche C(CH) Term Note
Exhibit H-5 Form of Tranche C(US) Term Note
Exhibit H-6 Form of Tranche D Term Note
Exhibit H-7 Form of Revolving Note
Exhibit H-8 Form of Swing Line Note
Exhibit I-1 Form of Mortgage
Exhibit I-2 Form of Deed of Trust
Exhibit J-1 Form of Domestic Subsidiary Securities Pledge Agreement
Exhibit J-2 Form of Foreign Subsidiary Securities Pledge Agreement
Exhibit J-3 Form of Holding Securities Pledge Agreement
Exhibit J-4 Form of US Borrower Securities Pledge Agreement
Exhibit K Form of Interest Rate Certificate
Exhibit L-1 Form of Section 4.1(f)(i) Certificate
Exhibit L-2 Form of Section 4.1(f)(v) Certificate
Exhibit M Form of Assumption Agreement
Exhibit N Form of Intercreditor Agreement
-viii-
<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of October [ ], 1996, among
METTLER-TOLEDO HOLDING INC., a Delaware corporation (together with its
successors, "Holding"), MT ACQUISITION CORP. (to be merged into Mettler-Toledo,
Inc.), a Delaware corporation (together with its successors, "US Borrower"),
METTLER-TOLEDO HOLDING AG, a corporation organized under the laws of Switzerland
and, after giving effect to the M-T Acquisition, a Wholly-Owned Subsidiary of US
Borrower (together with its successors, "CH Borrower" and, together with US
Borrower, the "Borrowers"), the several SUBSIDIARY SWING LINE BORROWERS named
herein, the several financial institutions from time to time party to this
Agreement (collectively the "Lenders"; individually each a "Lender"), MERRILL
LYNCH & CO., as documentation agent and arranger (together with its successors,
the "Documentation Agent" or "Arranger"), THE BANK OF NOVA SCOTIA
("Scotiabank"), as Administrative Agent (together with its successors, the
"Administrative Agent"), a Swing Line Lender and L/C Lender, CREDIT SUISSE, as a
Swing Line Lender and as a co-agent, and LEHMAN COMMERCIAL PAPER INC., as a
co-agent (together with Credit Suisse in its capacity as a co-agent and each of
their respective successors, the "Co-Agents"), as provided herein.
WHEREAS, subject to the terms and conditions of this Agreement, to
finance in part the M-T Acquisition, to repay certain existing Indebtedness of
the Borrowers and their Subsidiaries, to pay fees and expenses in connection
with the Transactions (as defined herein) and, after the Closing Date, to
provide working capital to, and for general corporate purposes of, US Borrower
and the Subsidiaries and to provide for the making of the Ciba Loan,
(i) the Lenders have agreed to make the Term Loans to the Borrowers
on the Closing Date; and
(ii) the Lenders have agreed to make available, during the period
from the Closing Date until 30 business days prior to the Revolving Loan
Maturity Date, (i) to the Borrowers, a revolving multicurrency credit
facility with letter of credit and swing line subfacilities and (ii) to
the Subsidiary Swing Line Borrowers, the swing line subfacility, and
WHEREAS, immediately following or in connection with the
consummation of the M-T Acquisition the rights and obligations of MT Acquisition
Corp. as "US Borrower" under and pursuant to the Loan Documents will be assumed
(the "Assumption") by Mettler Toledo Inc. pursuant to the Assumption Agreement.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as follows:
<PAGE>
-2-
ARTICLE I.
DEFINITIONS
1.1. Certain Defined Terms. The following terms have the following
meanings:
ABR Loan means a Committed Loan or an L/C Advance that bears
interest based on the Alternate Base Rate.
Acquisition means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person.
Additional Collateral -- see Section 7.14.
Adjusted Working Capital means the remainder of: (a) (i) the
consolidated current assets of US Borrower and the Subsidiaries, less (ii) the
amount of cash and cash equivalents included in such consolidated current
assets; less (b) (i) consolidated current liabilities of US Borrower and the
Subsidiaries, less (ii) the amount of short-term Indebtedness (including
Revolving Facility Loans and current maturities of long-term Indebtedness) of US
Borrower and the Subsidiaries included in such consolidated current liabilities.
Administrative Agent -- see the introduction to this Agreement.
Administrative Agent's Payment Office means (i) in respect of
payments by the Borrowers in U.S. Dollars, the address for payments set forth on
Schedule 11.2 for the Administrative Agent or such other address as the
Administrative Agent may from time to time specify in accordance with Section
11.2, and (ii) in the case of payments by the Borrowers in any Offshore
Currency, such address as the Administrative Agent may from time to time specify
in accordance with Section 11.2.
AEA means AEA Investors Inc., a Delaware corporation, and its
successors.
Affiliate means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly,
<PAGE>
-3-
the power to direct or cause the direction of the management and policies of
such other Person, whether through the ownership of voting securities or
membership interests, by contract, or otherwise.
Agents means the Documentation Agent and the Administrative Agent;
and Agent means the Documentation Agent or the Administrative Agent.
Agreed Alternative Currency -- see subsection 2.5(e).
Agreement means this Credit Agreement.
Aggregate Outstanding Revolving Credit means as to any Revolving
Facility Lender at any time an amount equal to the sum of (a) the aggregate
unpaid principal Dollar Equivalent amount at such time of all Revolving Loans
made by such Revolving Facility Lender, (b) such Revolving Facility Lender's Pro
Rata Share of the Effective Amount of all outstanding L/C Obligations at such
time and (c) such Revolving Facility Lender's Pro Rata Share of the aggregate
Dollar Equivalent amount of all outstanding Swing Line Loans.
Alternate Base Rate means, for any day, with respect to all ABR
Loans, a fluctuating rate of interest per annum (rounded, if necessary, to the
nearest 1/100 of 1%) equal to the higher of: (a) 0.50% per annum above the
latest U.S. Federal Funds Rate; and (b) the per annum rate of interest in effect
for such day as published in The Wall Street Journal (or a comparable
publication if The Wall Street Journal is not then published) as the "Prime
Rate" for major money center banks in the United States.
Annualized Interest Expense means, for any period of less than four
fiscal quarters, the product of (x) Interest Expense for such period and (y) a
fraction, the numerator of which is 365 and the denominator of which is the
number of days in such period.
Applicable Currency means, as to any particular payment or Loan,
U.S. Dollars or the Offshore Currency in which it is denominated or is payable.
Applicable Margin means (A) for Tranche B Term Loans, Tranche C Term
Loans and Tranche D Term Loans at any time, and for Tranche A Term Loans and
Revolving Facility Loans (including Non-U.S. $ Swing Line Loans), at any time
prior to the date upon which the consolidated financial results of US Borrower
and the Subsidiaries for four full fiscal quarters after the Closing Date are
provided to the Administrative Agent and the Lenders in accordance with
subsection 7.1(b) (the "Reset Date"),
<PAGE>
-4-
(a) with respect to ABR Loans, (i) in the case of Loans under the
Revolving Facility, 1.50%; (ii) in the case of Loans under the Tranche A-1
Term Loan Facility and under the Tranche A-2 Term Loan Facility, 1.50%;
(iii) in the case of Loans under the Tranche B Term Loan Facility, 2.00%;
(iv) in the case of Loans under the Tranche C(CH) Term Loan Facility and
the Tranche C(US) Term Loan Facility, 2.25%; and (v) in the case of Loans
under the Tranche D Term Loan Facility, 2.50%; and
(b) with respect to Offshore Rate Committed Loans, (i) in the case
of Loans under the Revolving Facility (including Non-U.S. $ Swing Line
Loans), 2.00%; (ii) in the case of Loans under the Tranche A-1 Term Loan
Facility and the Tranche A-2 Term Loan Facility, 2.50%; (iii) in the case
of Loans under the Tranche B Term Loan Facility, 3.00%; (iv) in the case
of Loans under the Tranche C(CH) Term Loan Facility and the Tranche C(US)
Term Loan Facility, 3.25%; and (v) in the case of Loans under the Tranche
D Term Loan Facility, 3.50%; and
(B) for Tranche A Term Loans and Revolving Facility Loans (including
Non-U.S. $ Swing Line Loans), at any time following the Reset Date, the
applicable percentage set forth below opposite the Debt to EBITDA Ratio set
forth below as of the most recent Computation Date:
<TABLE>
<CAPTION>
====================================================================================================
Offshore Loans
Debt to EBITDA Ratio ABR Loans
----------------------------------- -------------------------------
Revolving Loans and Tranche A Term Revolving Loans Tranche A Term
------------------- -------------- --------------- --------------
Non-U.S. $ Swing Loans Loans
---------------- ----- -----
Line Loans
----------
====================================================================================================
<S> <C> <C> <C> <C>
Greater than 4.25 to 1.0 2.00% 2.50% 1.00% 1.50%
- ----------------------------------------------------------------------------------------------------
Greater than 3.75 to 1.0 and less
than or equal to 4.25 to 1.0 1.75% 2.25% 0.75% 1.25%
- ----------------------------------------------------------------------------------------------------
Greater than 3.5 to 1.0 and less
than or equal to 3.75 to 1.0 1.50% 2.00% 0.50% 1.00%
- ----------------------------------------------------------------------------------------------------
Greater than 3.25 to 1.0 and less
than or equal to 3.5 to 1.0 1.25% 1.75% [ ]% 0.75%
- ----------------------------------------------------------------------------------------------------
Less than 3.25 to 1.0 1.00% 1.50% [ ]% 0.50%
====================================================================================================
</TABLE>
Any change in the Debt to EBITDA Ratio shall be effective to adjust the
Applicable Margin as of the date of receipt by the Administrative Agent of the
Interest Rate Certificate most recently delivered pursuant to subsection 7.2(b).
<PAGE>
-5-
Applicable Swing Line Lender means, with respect to any Swing Line
Loan, the Swing Line Lender to whom a request for such Loan has been made
hereunder or who has made such Loan.
Arranger -- see the introduction to this Agreement.
Asset Sale shall mean any sale, issuance, conveyance, transfer,
lease or other disposition (including by sale-leaseback, merger, consolidation
or otherwise) by US Borrower or any Subsidiary, in one or a series of related
transactions, of: (a) any capital stock of any Subsidiary; (b) all or
substantially all of the properties and assets of any division or line of
business of US Borrower or any Subsidiary; (c) any payment, liquidation or
realization on any Investment permitted by subsection 8.4(d); or (d) other than
inventory in the ordinary course of business, any properties or assets of US
Borrower or any Subsidiary. For the purposes of this definition, the term "Asset
Sale" shall not include (i) any sale, issuance, conveyance, transfer, lease or
other disposition of properties or assets to either Borrower or any Wholly-Owned
Subsidiary of US Borrower which is a Qualified Subsidiary Guarantor, (ii) any
Asset Sale not resulting in total consideration individually of more than the
Dollar Equivalent amount of U.S. $250,000, (iii) any sale, issuance, conveyance,
transfer, lease or other disposition of properties or assets of US Borrower or
any Subsidiary permitted by Section 8.2 (other than subsections (d), (i), (j)
and (k) thereof), (iv) Takings or Destructions, (v) any Lien permitted by
Section 8.1, (vi) any Investment permitted by Section 8.4 and (vii) any
Restricted Payment permitted by Section 8.13.
Assignee -- see subsection 11.8(a).
Assumption -- see recitals hereto.
Assumption Agreement means the Assumption Agreement executed and
delivered by a duly authorized officer of each of MT Acquisition Corp. and
Mettler-Toledo Inc. in connection with or following the consummation of the M-T
Acquisition, substantially in the form of Exhibit M with such changes thereto as
shall be approved by the Administrative Agent, providing for the Assumption.
Attorney Costs means and includes all reasonable fees and charges of
any law firm or other external counsel.
Available Revolving Facility Commitment means, as to any Revolving
Facility Lender at any time, an amount equal to the excess, if any, of (a) the
amount of such Revolving Facility Lender's Revolving Facility Commitment at such
time over (b) the sum of (i) the aggregate unpaid principal Dollar Equivalent
amount at such time of all Revolving Loans made
<PAGE>
-6-
by such Revolving Facility Lender, (ii) such Revolving Facility Lender's Pro
Rata Share of the Effective Amount of all outstanding L/C Obligations at such
time and (iii) such Revolving Facility Lender's Pro Rata Share of the aggregate
Dollar Equivalent amount of all outstanding Swing Line Loans.
Average Life means, when applied to any Indebtedness at any date,
the number of years obtained by dividing (a) the then outstanding aggregate
principal amount of such Indebtedness into (b) the total of the product obtained
by multiplying (i) the amount of each then remaining installment, sinking fund,
serial maturity or other required payment of principal, including payment at
final maturity, in respect thereof, by (ii) the number of years (calculated to
the nearest one-twelfth) which will elapse between such date and the making of
such payment.
Bankruptcy Code means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. ss. 101, et seq.), as amended.
Basic Documents means the Loan Documents, the Transaction Documents
and the Other Documents, collectively.
Beneficial Owner shall have the meaning assigned thereto in Rule
13d-3 of the SEC under the Exchange Act as in effect on the date hereof.
Board of Directors means the Board of Directors of any of US
Borrower, Holding and MT Investors or a designated committee thereof.
Borrowers -- see the introduction to this Agreement.
Borrowing means a borrowing hereunder consisting of Loans of the
same Facility and Type and in the same Applicable Currency made to a Borrower on
the same day by one or more Lenders under Article II and, other than in the case
of ABR Loans, having the same Interest Period.
Borrowing Date means any date on which a Borrowing occurs under
Section 2.3 or 2.17.
Business Day means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Zurich, Switzerland or, with
respect to any Subsidiary Swing Line Borrower, the applicable country of its
incorporation or organization are authorized or required by law to close and (i)
with respect to disbursements and payments in U.S. Dollars relating to Offshore
Rate Committed Loans, a day on which dealings are carried on in the applicable
offshore U.S. Dollar interbank market, and (ii) with respect to disbursements
and
<PAGE>
-7-
payments in and calculations pertaining to any Offshore Currency, a day on which
commercial banks are open for foreign exchange business in London, England, and
on which dealings in the relevant Offshore Currency are carried on in the
applicable offshore foreign exchange interbank market in which disbursement of
or payment in such Offshore Currency will be made or received hereunder.
Capital Adequacy Regulation means, in respect of any Lender, any
guideline, request or directive of any central bank or other Governmental
Authority, or any other law, rule or regulation, whether or not having the force
of law, in each case, regarding capital adequacy of such Lender or of any
corporation controlling such Lender which is generally applicable to banks or
corporations controlling banks in any applicable jurisdiction (and not
applicable to such Lender or the corporation controlling such Lender solely due
to the financial or regulatory condition of such Lender or such corporation).
Capital Expenditures means all expenditures which, in accordance
with GAAP, would be required to be capitalized and shown on the consolidated
balance sheet of US Borrower, but excluding (x) expenditures made in connection
with the replacement, substitution or restoration of assets to the extent
financed (i) from insurance proceeds (or other similar recoveries) paid on
account of the loss of or damage to the assets being replaced or restored or
(ii) with awards of compensation arising from the taking by eminent domain,
expropriation or condemnation of the assets being replaced, (y) the M-T
Acquisition and (z) any Acquisition effected in accordance with subsection
8.4(f).
Capital Lease, as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
Cash means money, currency or a credit balance in a deposit account.
Cash Collateralize means to pledge and deposit with or deliver to
the Administrative Agent, for the benefit of the Administrative Agent and the
Revolving Facility Lenders, as collateral for the L/C Obligations, cash or
deposit account balances pursuant to documentation in form and substance
reasonably satisfactory to the Administrative Agent and the L/C Lender (which
documents are hereby consented to by the Lenders). Derivatives of such term
shall have corresponding meanings. The Borrowers hereby grant to the
Administrative Agent, for the benefit of the Administrative Agent, the L/C
Lender and the Revolving Facility Lenders, a security interest in all such cash
and deposit account balances. Cash collateral shall be maintained in blocked
deposit accounts at Scotiabank.
<PAGE>
-8-
Cash Equivalents means (i) any security, maturing not more than one
year after the date of acquisition, issued by the United States of America or an
instrumentality or agency thereof and guaranteed fully as to principal, premium,
if any, and interest by the United States of America; (ii) any certificate of
deposit, time deposit or bankers' acceptance (or, with respect to non-U.S.
banking institutions, similar instruments), maturing not more than one year
after the day of acquisition, issued by any commercial banking institution that
is a member of the Federal Reserve System or a commercial banking institution
organized and located in a country recognized by the United States of America,
in each case, having combined capital and surplus and undivided profits of not
less than $500 million (or the foreign currency equivalent thereof), whose
short-term debt has a rating, at the time as of which any investment therein is
made, of "P-1" (or higher) according to Moody's or "A-1" (or higher) according
to S&P; (iii) commercial paper maturing not more than one year after the date of
acquisition issued by a corporation (other than an Affiliate or Subsidiary of
either Borrower) with a rating, at the time as of which any investment therein
is made, of "P-1" (or higher) according to Moody's or "A-1" (or higher)
according to S&P; (iv) any money market deposit accounts issued or offered by a
commercial banking institution that is a member of the Federal Reserve System or
a commercial banking institution organized and located in a country recognized
by the United States of America, in each case, having combined capital and
surplus in excess of $500 million (or the foreign currency equivalent thereof);
and (v) other short-term investments utilized by Foreign Subsidiaries in
accordance with normal investment practices for cash management not exceeding $5
million in aggregate principal amount outstanding at any time.
Change in Law means the introduction of any Requirement of Law, or
any change in any Requirement of Law or in the interpretation or administration
of any Requirement of Law.
Change of Control means any of the following events: (a) Holding
shall cease to own directly 100% on a fully diluted basis of the economic and
voting interest in US Borrower's capital stock; or (b) US Borrower shall cease
to own directly 100% on a fully diluted basis of the economic and voting
interest in CH Borrower's capital stock or shall not have the power to appoint
all of the members of the Board of Directors of US Borrower; or (c) prior to an
initial public offering of common stock of MT Investors or Holding, the
Investors shall cease to own on a fully diluted basis in the aggregate at least
51% of the economic or voting interest in MT Investors' or Holding's capital
stock, as the case may be, or after such an initial public offering, any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Investors, is or becomes (as a result of the
acquisition or issuance of securities, by merger or otherwise) the beneficial
owner on a fully diluted basis of more than 30% of the economic or voting
interest in MT Investors' or Holding's capital stock, as the case may be; (d)
after the initial public offering of common stock of MT Investors or Holding,
during any consecutive two-year period, individuals who at the beginning of such
period constituted the
<PAGE>
-9-
Board of Directors of MT Investors or Holding, as the case may be (together with
any new directors whose election by the shareholders of MT Investors or Holding,
as the case may be, was approved by a vote of 66-2/3% of the directors then
still in office who were either directors at the beginning of such period or
whose election as directors or nomination for election was previously so
approved), cease for any reason to constitute a majority of the Board of
Directors of MT Investors or Holding, as the case may be, then in office; or (e)
a "Change of Control" or similar event shall occur as provided in the Senior
Subordinated Note Indenture; provided, however, that the merger of any of US
Borrower, Holding and MT Investors with and into any other of such three Persons
shall not, in and of itself, be deemed a Change of Control.
CH Borrower -- see the introduction to this Agreement.
CHF and Swiss Francs mean lawful money of Switzerland.
CH Borrower Guarantee means a guarantee substantially in the form of
Exhibit E-1 entered into and delivered by CH Borrower.
CH Foreign Subsidiary means each Foreign Subsidiary which is also a
Subsidiary of CH Borrower.
Chinese Subsidiaries means each of the following Subsidiaries:
Changzhou Toledo Electronic Scale Ltd., Changzhou; Panzhihua Toledo Electronic
Scale Ltd., Panzhihua; Mettler-Toledo Instruments (Shanghai) Ltd., Shanghai; and
Xinjian Toledo Electronic Scale Ltd., Urumgi, each incorporated in the People's
Republic of China, and their respective successors.
Ciba Loan means the loan made by Mettler-Toledo AG, Greifensee (a
Subsidiary) to [ ] pursuant to the Ciba Loan Documents in the amount of CHF [ ].
Ciba Loan Documents means the documents set forth on Schedule 1.1
[ ], as amended and in effect from time to time in accordance with Section 8.18.
Ciba Reimbursement Agreement means [TO COME], as amended and in
effect from time to time in accordance with Section 8.18.
Closing Date means the date on which all conditions precedent set
forth in Section 5.1 are satisfied or waived by all Lenders.
Co-Agents -- see the introduction to this Agreement.
Code means the Internal Revenue Code of 1986, as amended.
<PAGE>
-10-
Collateral means all of the Security Agreement Collateral, Pledged
Securities and Mortgaged Real Property.
Commitment, as to each Lender, means its Tranche A-1 Facility
Commitment, Tranche A-2 Facility Commitment, Tranche B Facility Commitment,
Tranche C(CH) Facility Commitment, Tranche C(US) Facility Commitment, Tranche D
Facility Commitment, Revolving Facility Commitment or Swing Line Commitment.
Committed Borrowing means a Borrowing hereunder consisting of
Committed Loans of one Facility made by the Lenders ratably according to their
respective Pro Rata Shares in such Facility.
Committed Loan means a Revolving Loan, a Swing Line Loan or a Term
Loan.
Company means Holding or any of its Subsidiaries.
Compliance Certificate means a certificate substantially in the form
of Exhibit C and delivered by the Borrowers pursuant to Section 7.2(a).
Computation Date means any date on which the Administrative Agent
determines the Dollar Equivalent amount of any Offshore Currency Loans pursuant
to Section 2.5(a) or 2.8(b).
Computation Period means each period of four full consecutive fiscal
quarters most recently ended and for which financial statements are or are
required to be available. Prior to such time as four full consecutive fiscal
quarters of financial information for US Borrower are available, Computation
Period shall include financial information of the Mettler-Toledo Group to the
extent necessary such that four full fiscal quarters of financial information
form the basis of the Computation Period.
Confidential Memorandum shall mean the Confidential Memorandum,
dated September, 1996, and all written supplemental material thereto prepared
by, or on behalf of, the Borrowers and transmitted to the Lenders prior to the
Closing Date.
Consolidated Net Income means, for any period, the consolidated net
income of US Borrower and the Subsidiaries for such period; provided, however,
that there shall be excluded therefrom (i) the income of any Subsidiary to the
extent that the transfer of such income by such Subsidiary to either Borrower or
its direct parent at the time is restricted in any material way by operation of
the terms of its charter or any judgment, decree, order, statute, rule or
governmental regulation applicable to such Subsidiary or any agreement or
instrument
<PAGE>
-11-
which is binding on such Subsidiary, (ii) the income of any Person which is not
a Subsidiary (but any dividends or other distributions received in cash by
either Borrower or any Subsidiary from such Person shall be included in
Consolidated Net Income), (iii) unrealized gains or losses in respect of Swap
Contracts and (iv) unrealized foreign currency transaction gains or losses in
respect of Indebtedness of any Person denominated in a currency other than the
functional currency of such Person and permitted by Section 8.5.
Consolidated Net Worth means at the date of determination thereof,
the sum of (a) all items which in conformity with GAAP would be classified as
stockholders' equity on a consolidated balance sheet of US Borrower at such date
and (b) preferred stock (whether or not so classified as stockholders' equity)
provided that such preferred stock (i) has no mandatory redemptions prior to the
Tranche D Term Loan Maturity Date and (ii) was issued and is outstanding on
terms and conditions reasonably satisfactory to the Administrative Agent;
provided, however, that Consolidated Net Worth shall (i) include (without
duplication) the principal amount of all loans outstanding at such time to
employees to finance the purchase of stock of MT Investors, and (ii) be
calculated without giving effect to (1) any item excluded from the definition of
Consolidated Net Income (other than clauses (i) and (ii) thereof), (2) any
write-off of deferred financing costs in connection with the early
extinguishment of Indebtedness hereunder or under the Senior Subordinated Notes,
(3) cumulative currency translation adjustments and net unrealized investment
gains and losses, (4) charges relating to the closure of the Westerville, Ohio
facility and (5) nonrecurring charges related to the M-T Acquisition.
Contingent Obligation means, as to any Person, any direct or
indirect liability of such Person, whether or not contingent, with or without
recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other obligation (the "primary obligations") of another Person (the
"primary obligor"), including any obligation of such Person (i) to purchase,
repurchase or otherwise acquire such primary obligations or any security
therefor, (ii) to advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (iv)
otherwise to assure or hold harmless the holder of any such primary obligation
against loss in respect thereof (each of (i) - (iv), a "Guaranty Obligation");
(b) with respect to any Surety Instrument (other than any Letter of Credit)
issued for the account of such Person or as to which such Person is otherwise
liable for reimbursement of drawings or payments; (c) to purchase any materials,
supplies or other property from, or to obtain the services of, another Person if
the relevant contract or other related document or obligation requires that
payment for such materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such materials, supplies or
other property is ever
<PAGE>
-12-
made or tendered, or such services are ever performed or tendered; or (d) in
respect of any Swap Contract. The amount of any Contingent Obligation shall (x)
in the case of a Guaranty Obligation, be deemed equal to the stated or
determinable amount of the primary obligation in respect of which such Guaranty
Obligation is made or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof, and (y) in the case of
other Contingent Obligations, be equal to the maximum reasonably anticipated
liability in respect thereof.
Contractual Obligation means, as to any Person, any term, covenant,
provision of condition of any security issued by such Person or of any
agreement, undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or by which it
or any of its property is bound.
Conversion/Continuation Date means any Business Day on which either
Borrower (i) converts Committed Loans of a Facility from one Type to the other
Type or (ii) continues as Committed Loans of the same Type, but with a new
Interest Period, Committed Loans of a Facility having Interest Periods expiring
on such date.
Covered Taxes means any and all Taxes, other than, in the case of
each Lender or Agent, Taxes of any jurisdiction (or any political subdivision
thereof) imposed on or measured by such Lender's or such Agent's net income or
net profits (including any franchise Taxes imposed thereon and any branch
profits Taxes), that arise by reason of a former, present or future connection
between such Lender or Agent and such jurisdiction (including, without
limitation, a connection arising from such Lender or Agent being or having been
a citizen or resident of such jurisdiction, or having been organized, present or
engaged in a trade or business in such jurisdiction, or having or having had a
permanent establishment or fixed place of business in such jurisdiction, but
excluding a connection arising solely from such Lender or Agent having executed,
delivered, performed its obligations or received a payment under this
Agreement).
Credit Extension means and includes (a) the making of any Loan
hereunder and (b) the Issuance of any Letter of Credit hereunder.
Credit Facilities means the Revolving Facility together with the
Term Loan Facilities.
Current Liabilities means, at any time, all amounts which, in
accordance with GAAP, would be included as current liabilities on a consolidated
balance sheet of US Borrower and the Subsidiaries at such time, excluding
current maturities of Indebtedness.
<PAGE>
-13-
Debt to Be Repaid means all Indebtedness listed on Schedule 5.1(p).
Debt to EBITDA Ratio means, as of the last day of any fiscal
quarter, the ratio of: (a) the total consolidated Indebtedness of US Borrower
and the Subsidiaries as of such day to (b) EBITDA for the Computation Period
ending on such day.
Defaulting Lender means any Lender with respect to which a Lender
Default is in effect.
Destruction has the meaning assigned to that term in the Mortgages.
Deutschemarks and DM each mean lawful money of Germany.
Disinterested Director means a member of a Board of Directors who
does not have any material direct or indirect financial interest in or with
respect to any transaction or series of transactions.
Documentation Agent -- see the introduction to this Agreement.
Dollar Equivalent means, at any time, (a) as to any amount
denominated in U.S. Dollars, the amount thereof at such time, and (b) as to any
amount denominated in Swiss Francs, Deutschemarks or other Offshore Currency,
the equivalent amount in U.S. Dollars as determined by the Administrative Agent
at such time on the basis of the Spot Rate for the purchase of U.S. Dollars with
such Swiss Francs, Deutschemarks or other Offshore Currency, as applicable, on
the most recent Computation Date provided for in subsection 2.5(a) or such other
date as is specified herein.
Domestic Guarantors means Holding, US Borrower and the Domestic
Subsidiary Guarantors.
Domestic Loan Parties means the Domestic Guarantors.
Domestic Subsidiary means a Subsidiary that is incorporated under
the laws of any State of the United States or Puerto Rico or the District of
Columbia and that is a direct Subsidiary of (i) US Borrower or (ii) another
Domestic Subsidiary.
Domestic Subsidiary Guarantee means a guarantee substantially in the
form of Exhibit E-2 entered into and delivered by a Domestic Subsidiary.
<PAGE>
-14-
Domestic Subsidiary Guarantor means each Domestic Subsidiary which
executes and delivers a Domestic Subsidiary Guarantee.
Domestic Subsidiary Securities Pledge Agreement means a securities
pledge agreement substantially in the form of Exhibit J-1 entered into and
delivered by a Domestic Subsidiary.
EBITDA means, for any period, the sum of: (a) Consolidated Net
Income of US Borrower and the Subsidiaries for such period excluding, to the
extent reflected in determining such Consolidated Net Income, (i) extraordinary
gains and losses for such period, (ii) any gain or loss associated with the sale
or write-down of assets not in the ordinary course of business, (iii) any
deferred financing costs for such period written off in connection with the
early extinguishment of Indebtedness hereunder or under the Senior Subordinated
Notes, (iv) any non-cash portion of the charge for such period relating to the
closure of the Westerville, Ohio facility, (v) non-recurring non-cash charges
related to the M-T Acquisition and any other acquisition by US Borrower or any
Subsidiary occurring after the Closing Date and (vi) any other non-cash or
non-recurring items of income or expense (other than any non-cash item of
expense requiring an accrual or reserve for future cash expense), plus (b) to
the extent deducted in determining Consolidated Net Income, Interest Expense,
income tax and capital tax expense, depreciation, depletion and amortization
expense for such period. Prior to such time as four full fiscal quarters of
financial information of US Borrower after the Closing Date are available
pursuant to this Agreement, EBITDA shall be calculated by taking into account
the results of the Mettler-Toledo Group (in accordance with this definition) for
such number of fiscal quarters so that, when added to the financial information
of US Borrower, four quarters of financial information form the basis for the
calculation under this definition.
Effective Amount means with respect to any outstanding L/C
Obligations on any date, the aggregate Dollar Equivalent amount of such L/C
Obligations on such date after giving effect to any Issuances of Letters of
Credit occurring on such date and any other changes in the aggregate Dollar
Equivalent amount of the L/C Obligations as of such date, including as a result
of any reimbursement of outstanding unpaid drawings under any Letter of Credit
or any reduction in the maximum amount available for drawing under any Letter of
Credit taking effect on such date.
Eligible Assignee means (i) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least U.S. $100 million; (ii) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political subdivision of
any such country, and having a combined capital and surplus in a Dollar
Equivalent amount of at least U.S. $100 million; provided, however, that such
bank is
<PAGE>
-15-
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iii) a Person
that is primarily engaged in the business of commercial banking and that is (A)
a Subsidiary of a Lender, (B) a Subsidiary of a Person of which a Lender is a
Subsidiary, or (C) a Person of which a Lender is a Subsidiary; and (iv) an
insurance company, mutual fund or other financial institution organized under
the laws of the United States, any state thereof, any other country which is a
member of the OECD or a political subdivision of any such country with assets
under management in a Dollar Equivalent amount of at least U.S. $100 million;
provided, however, that no Person shall be an Eligible Assignee in respect of
any Tranche A-1 Commitment or Tranche A-2 Commitment or Revolving Loan
Commitment unless, at the time of the proposed assignment to such Person, such
Person is able to make Tranche A-1 Loans, Tranche A-2 Loans or Revolving Loans,
as the case may be, in U.S. Dollars and each Offshore Currency.
Environmental Approvals means any material approval, determination,
order, consent, authorization, certificate, license, permit, franchise,
concession or validation of, or exemption or other action by, or filing,
recording or registration with, or notice to, any Governmental Authority
pursuant to or required under any Environmental Law.
Environmental Claims means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability under, or
responsibility for violation of, any Environmental Law, or for any release or
threatened release of a Hazardous Material or injury to the environment.
Environmental Laws means all applicable federal, state, local and
foreign laws, common law or regulations, treaties, orders, decrees, permits,
licenses, authorizations, judgments or injunctions issued, promulgated, approved
or entered thereunder, now or hereafter in effect in each case relating to
pollution or protection of employee health or safety or the environment
(including, without limitation, ambient and indoor air, surface water,
groundwater, soil, land surface or subsurface) including, without limitation,
laws relating to (a) emissions, discharges, releases or threatened releases of
Hazardous Materials into the environment and (b) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of Hazardous Materials.
Equipment has the meaning assigned to that term in the Security
Agreements.
Equity Issuance means the issuance of common equity securities by
Holding directly or indirectly to the Investors for gross proceeds of the Dollar
Equivalent amount of not less than U.S. $190 million on or prior to the Closing
Date; provided, however, that up to the Dollar Equivalent amount of U.S. $7 1/2
million to be contributed by employees of the Mettler-Toledo Group may be
contributed after the Closing Date, but will be contributed by AEA or its
<PAGE>
-16-
designee if not so contributed by employees prior to December 31, 1996 (and the
term Equity Issuance shall include such later contributions to the extent made
by December 31, 1996).
ERISA means the Employee Retirement Income Security Act of 1974.
ERISA Affiliate means any trade or business (whether or not
incorporated) under common control with a Loan Party within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
ERISA Event means (a) a Reportable Event with respect to a Pension
Plan; (b) the failure to make a required contribution to a Pension Plan if such
failure could give rise to a Lien under Section 302(f) of ERISA; (c) a
withdrawal by a Loan Party or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which
is treated as such a withdrawal under Section 4062(e) of ERISA; (d) a complete
or partial withdrawal by a Loan Party or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (e) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (f) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA or the commencement of
proceedings by the PBGC for the termination of, or the appointment of a trustee
to administer, any Pension Plan or Multiemployer Plan; (g) the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon a Loan Party or any ERISA
Affiliate; (h) the making of any amendment to a Pension Plan which could result
in the imposition of a Lien or the posting of a bond or other security; (i) the
engagement in any transaction by a Loan Party or any ERISA Affiliate in
connection with which any such entity could be subject to either a tax imposed
by Section 4975(a) of the Code or the corresponding civil penalty assessed
pursuant to Section 502(i) of ERISA; or (j) the application for a waiver of the
minimum funding standard under Section 412 of the Code with respect to a Pension
Plan.
Event of Default means any of the events or circumstances specified
in Section 9.1.
Excess Cash Flow means, for any period, the remainder of (a) the
sum, without duplication, of (i) Consolidated Net Income for such period
(calculated by (x) excluding any gains or losses on the sale or other
disposition of assets (other than sales of inventory in the ordinary course of
business), (y) adding back the non-cash component of all extraordinary or
non-recurring items of expense and (z) deducting the non-cash component of all
extraordinary
<PAGE>
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or non-recurring items of income, in each case to the extent taken into account
in the calculation of such Consolidated Net Income), plus (ii) all depreciation
and amortization of assets (including goodwill and other intangible assets),
non-cash interest expense and all other non-cash charges of US Borrower and the
Subsidiaries deducted in determining Consolidated Net Income for such period,
plus (iii) any net decrease in Adjusted Working Capital (as reflected on the
audited consolidated statement of cash flows in accordance with FAS 52) during
such period (exclusive of decreases in working capital associated with asset
sales), plus (iv) all federal, state, local and foreign income or capital taxes
(whether paid or deferred) of US Borrower and the Subsidiaries deducted in
determining Consolidated Net Income for such period, minus (b) the sum, without
duplication, of (i) regularly scheduled installment payments of principal of
Term Loans pursuant to Section 2.9, voluntary prepayments of the Term Loans to
the extent made with internally generated funds, prepayments of principal of
Revolving Facility Loans pursuant to Section 2.8, the aggregate principal amount
of permanent principal payments with respect to any other Indebtedness of US
Borrower and the Subsidiaries, prepayments of the Revolving Loans to the extent
of any concurrent permanent reduction in the Revolving Facility Commitments, and
the portion of any regularly scheduled payments with respect to Capital Leases
allocable to principal, in each case made during such period (in any such case
other than to the extent any such payment is made from the proceeds of any
capital contribution to US Borrower or any Subsidiary or from any proceeds from
the issuance or sale of capital stock of US Borrower or any Subsidiary, any
incurrence of Indebtedness by US Borrower or any Subsidiary or from the proceeds
of any sale or other disposition of assets by US Borrower or any Subsidiary
(other than sales of inventory in the ordinary course of business)), plus (ii)
Capital Expenditures for such period (other than to the extent made from any
capital contribution to US Borrower or any Subsidiary or from any proceeds from
the issuance or sale of capital stock of US Borrower or any Subsidiary, any
incurrence of Indebtedness by US Borrower or any Subsidiary or from the proceeds
of any sale or other disposition of assets by US Borrower or any Subsidiary
(other than sales of inventory in the ordinary course of business)), plus (iii)
all federal, state, local and foreign income or capital taxes paid by US
Borrower and the Subsidiaries during such period, plus (iv) non-cash charges
added back in any previous period pursuant to item (a)(ii) above to the extent
such charge has become a cash item in the current period, plus (v) any net
increase in Adjusted Working Capital (as reflected on the audited consolidated
statement of cash flows in accordance with FAS 52) during such period (exclusive
of increases in working capital associated with asset sales).
Exchange Act means the United States Securities Exchange Act of
1934.
Existing Affiliate Agreements -- see Section 8.6.
Facility means any of the Tranche A-1 Term Loan Facility, the
Tranche A-2 Term Loan Facility, the Tranche B Term Loan Facility, the Tranche
C(CH) Term Loan Facility, the
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Tranche C(US) Term Loan Facility, the Tranche D Term Loan Facility or the
Revolving Facility.
Facility Fee -- see subsection 2.11(b).
Fee Letters -- see subsection 2.16(a).
FIRREA means the Financial Institutions Reform, Recovery &
Enforcement Act of 1989, as amended from time to time, and any successor
statute.
Foreign Guarantor means each Foreign Subsidiary which executes and
delivers a Foreign Subsidiary Guarantee.
Foreign Loan Parties means CH Borrower, the Subsidiary Swing Line
Borrowers and the Foreign Guarantors.
Foreign Subsidiary means a direct or indirect Subsidiary of US
Borrower which is not a Domestic Subsidiary.
Foreign Subsidiary Guarantee means a guarantee substantially in the
form of Exhibit E-3 entered into and delivered by a Foreign Subsidiary, but with
such modifications, additions and deletions as may be required to comply with
applicable law.
Foreign Subsidiary Securities Pledge Agreement means a securities
pledge agreement substantially in the form of Exhibit J-2 entered into and
delivered by a Foreign Subsidiary, but with such modifications, additions and
deletions as may be required to comply with applicable law.
FRB means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
French Francs and FF each mean lawful money of France.
GAAP means generally accepted accounting principles set forth as of
the relevant date in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
date of determination.
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Governmental Authority means any nation or government, any state,
canton or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
Guarantees means the US Borrower Guarantee, the Domestic Subsidiary
Guarantees and the Foreign Subsidiary Guarantees.
Guarantors means each of the Domestic Guarantors and the Foreign
Guarantors.
Guaranty Obligation has the meaning specified in the definition of
Contingent Obligation.
Hazardous Materials means any pollutant, contaminant, toxic,
hazardous or extremely hazardous substance, constituent or waste, or any other
constituent, waste, material, compound or substance including, without
limitation, petroleum (including crude oil or any fraction thereof) or any
petroleum product, subject to regulation under any Environmental Law.
Holding Guarantee means a guarantee substantially in the form of
Exhibit E-4 entered into and delivered by Holding.
Holding Securities Pledge Agreement means a securities pledge
agreement substantially in the form of Exhibit J-3 entered into and delivered by
Holding.
Honor Date -- see subsection 3.3(b).
Indebtedness of any Person means, without duplication, (a) all
indebtedness for borrowed money of such Person; (b) all obligations issued,
undertaken or assumed by such Person as the deferred purchase price of property
or services (other than trade payables and accrued expenses entered into in the
ordinary course of business on ordinary terms); (c) all non-contingent
reimbursement or payment obligations of such Person with respect to Surety
Instruments (such as, for example, unpaid reimbursement obligations in respect
of a drawing under a letter of credit); (d) all obligations of such Person
evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses; (e) all indebtedness of such Person created or
arising under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property); (f) all obligations of such Person with respect to Capital
<PAGE>
-20-
Leases; (g) all net obligations of such Person with respect to Swap Contracts
(such obligations to be equal at any time to the aggregate net amount that would
have been payable by such Person at the most recent fiscal quarter end in
connection with the termination of such Swap Contracts at such fiscal quarter
end); (h) all indebtedness of other Persons referred to in clauses (a) through
(g) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
property (including accounts and contracts rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness; and (j) all Guaranty Obligations of such Person in respect of
indebtedness or obligations of others of the kinds referred to in clauses (a)
through (h) above. Indebtedness shall not include accounts extended by suppliers
in the ordinary course on normal trade terms in connection with the purchase of
goods and services.
Indemnified Person -- see Section 11.4.
Independent Auditor -- see subsection 7.1(a).
Initial Funding Date means the first date on which any Lender makes
a Loan hereunder.
Initial Loans means the Loans made on the Initial Funding Date.
Insolvency Proceeding means, with respect to any Person, (a) any
case, action or proceeding with respect to such Person before any court or by or
before any other Governmental Authority relating to bankruptcy, insolvency,
reorganization, liquidation, receivership, dissolution, sequestration,
conservatorship, winding-up or relief of debtors, or (b) any assignment for the
benefit of creditors, composition, marshalling of assets for creditors, or other
similar arrangement in respect of such Person's creditors generally or any
substantial portion of its creditors.
Intellectual Property -- see Section 6.15.
Intercompany Indebtedness -- see subsection 8.4(c).
Intercreditor Agreement means an Intercreditor Agreement,
substantially in the form of Exhibit N with such changes thereto as shall be
approved by the Administrative Agent.
Interest Expense means for any period the consolidated interest
expense of US Borrower and the Subsidiaries for such period (including all
imputed interest on Capital Leases, but excluding (i) amortization of fees and
expenses in connection with the M-T Acquisition, this
<PAGE>
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Agreement and the transactions contemplated by the foregoing, (ii) amortization
in connection with Swap Contracts and (iii) interest expense on deferred
compensation or customer deposits).
Interest Payment Date means (a) as to any ABR Loan, the last
Business Day of each calendar quarter, (b) as to any Offshore Rate Committed
Loans, the last day of each Interest Period applicable to such Loan; provided,
however, that if any Interest Period for an Offshore Rate Committed Loan exceeds
three months, the date that falls three months after the beginning of such
Interest Period also shall be an Interest Payment Date and (c) as to any
Non-U.S. $ Swing Line Loan, the last Business Day of each month.
Interest Period means, as to any Offshore Rate Committed Loan, the
period commencing on the Borrowing Date of such Loan or, in the case of any
Offshore Rate Committed Loan, on the Conversion/Continuation Date on which such
Loan is converted into or continued as an Offshore Rate Committed Loan, and
ending on the date one, two, three, six, or, if available from all of the
Lenders, twelve months thereafter as selected by the applicable Borrower in its
Notice of Committed Borrowing or Notice of Conversion/Continuation, as the case
may be; provided, however, that:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the
following Business Day unless, in the case of an Offshore Rate Committed
Loan, the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall end
on the preceding Business Day;
(ii) any Interest Period for an Offshore Rate Committed Loan that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period;
(iii) no Interest Period for any Revolving Facility Loan shall
extend beyond the scheduled Termination Date;
(iv) no Interest Period for any Tranche A-1 Term Loan or Tranche
A-2 Term Loan shall extend beyond any scheduled installment date unless
the aggregate principal amount of Term Loans under such Facility having
Interest Periods that will expire on or before such scheduled installment
date equals or exceeds the amount of the installment of Term Loans due
under such Facility on such date; and
(v) no Interest Period for any Term Loan under the Tranche B Term
Loan Facility, the Tranche C(CH) Term Loan Facility, the Tranche C(US)
Term Loan Facility
<PAGE>
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or the Tranche D Term Loan Facility shall extend beyond any scheduled
installment date unless the aggregate principal amount of all Term Loans
under such Facility that are ABR Loans, plus the aggregate principal
amount of all Term Loans under such Facility having Interest Periods that
will expire on or before such scheduled installment date, equals or
exceeds the amount of the installment of the Term Loans under such
Facility due on such date.
Interest Rate Certificate means an officers' certificate
substantially in the form of Exhibit K, delivered pursuant to subsection 7.1(b),
demonstrating in reasonable detail the calculation of the Debt to EBITDA Ratio
as of the last day of the subject period.
Inventory means all of the inventory of US Borrower and the
Subsidiaries, whether now existing or existing in the future, including, without
limitation: (i) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in their business, (ii) all
goods, wares and merchandise, finished or unfinished, held for sale or lease or
leased or furnished or to be furnished under contracts of service, and (iii) all
goods returned or repossessed by US Borrower or the Subsidiaries.
Investment -- see Section 8.4.
Investors means AEA and its current, former and future employees,
stockholders, directors and officers and the officers of Holding, US Borrower
and CH Borrower, and (i) trusts for the benefit of such Persons or the spouses,
issue, parents or other relatives of such Persons, (ii) entities controlling or
controlled by such Persons and (iii) in the event of the death of any such
individual Person, heirs or testamentary legatees of such Person. Investors
shall also include Ciba-Geigy AG and its direct and indirect subsidiaries, the
specialty chemicals entity that will be spun off from Novartis in connection
with the merger of Ciba-Geigy and Sandoz and the direct and indirect
subsidiaries of such specialty chemicals entity; provided, however, that no such
entity referred to in this sentence owns, directly or indirectly, more than
seven and one-half percent (7 1/2%) on a fully diluted basis of the economic or
voting interest in the capital stock of Holding.
IRS means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
Issuance Date -- see subsection 3.1(a).
Issue means, with respect to any Letter of Credit, to issue or to
extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "Issued," "Issuing" and "Issuance" have corresponding
meanings.
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Japanese Yen means lawful money of Japan.
Joint Venture means a corporation, partnership, limited liability
company, joint venture or other similar legal arrangement (whether created by
contract or conducted through a separate legal entity) now or hereafter formed
by US Borrower or any Subsidiary with another Person or Persons in order to
conduct a common venture or enterprise with such Person or Persons and that is
not a Subsidiary.
L/C Advance means each L/C Lender's participation in any L/C
Borrowing in accordance with its Pro Rata Share.
L/C Amendment Application means an application form for amendment of
outstanding standby or commercial documentary letters of credit as shall at any
time be in use by the L/C Lender, as the L/C Lender shall request.
L/C Application means an application form for issuances of standby
or commercial documentary letters of credit as shall at any time be in use by
the L/C Lender, as the L/C Lender shall request.
L/C Borrowing means an extension of credit resulting from a drawing
under any Letter of Credit which shall not have been reimbursed on the date when
made nor converted into a Borrowing of Revolving Facility Loans under subsection
3.3(b).
L/C Commitment means the commitment of the L/C Lender to Issue
Letters of Credit from time to time Issued or outstanding under Article III, in
an aggregate Dollar Equivalent amount not to exceed on any date an amount equal
to the lesser of U.S. $40 million and the amount of the combined Commitments of
all L/C Lenders; it being understood that the L/C Commitment is a part of the
combined Revolving Facility Commitments of all L/C Lenders, rather than a
separate, independent commitment.
L/C Lender means Scotiabank or such other Lender or Lenders selected
by the Administrative Agent satisfactory to the Borrowers to issue Letters of
Credit.
L/C Obligations means at any time the sum of (a) the aggregate
undrawn Dollar Equivalent amount of all Letters of Credit then outstanding, plus
(b) the Dollar Equivalent amount of all unreimbursed drawings under all Letters
of Credit, including all outstanding L/C Borrowings.
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L/C-Related Documents means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document relating to
any Letter of Credit, including any of the L/C Lender's standard form documents
for letter of credit issuances.
Lease means any lease, sublease, franchise agreement, license,
occupancy or concession agreement.
Lender -- see the introduction to this Agreement; Lender shall
include any L/C Lender or Swing Line Lender.
Lender Default means (i) the refusal (which has not been retracted)
of a Lender to make available its portion of any Borrowing (including pursuant
to Section 2.18) or to fund its portion of any unreimbursed payment under
Section 3.3 or (ii) a Lender having notified the Administrative Agent and/or
either Borrower that it does not intend to comply with the obligations under
Section 2.1, 2.18 or 3.3.
Lending Office means, as to any Lender, the office or offices of
such Lender (or, in the case of any Offshore Currency Loan, of an Affiliate of
such Lender) specified as its "Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office", as the case may be, on Schedule 11.2, or such other
office or offices of such Lender (or, in the case of any Offshore Currency Loan,
of an Affiliate of such Lender) as such Lender may from time to time specify to
the Borrowers and the Administrative Agent.
Letter of Credit means any letter of credit (whether a standby
letter of credit or a commercial documentary letter of credit) Issued by the L/C
Lender pursuant to Article III.
Lien means any security interest, mortgage, deed of trust, pledge,
claim, hypothecation, assignment for security, charge or deposit arrangement,
preferential arrangement in the nature of security or lien (statutory or other),
or other encumbrance of any kind in respect of any property (including those
created by, arising under or evidenced by any conditional sale or other title
retention agreement).
Loan means an extension of credit by a Lender to the Borrowers under
Article II or Article III, which may be a Term Loan, a Revolving Loan, a Swing
Line Loan or an L/C Advance.
Loan Documents means this Agreement, any Note, the Fee Letters, the
L/C-Related Documents, the Guarantees, each Security Document and all other
documents delivered to any Agent or any Lender in connection herewith.
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Loan Parties means the Domestic Loan Parties and the Foreign Loan
Parties.
Losses means as to any Person, the losses, liabilities, claims
(including those based upon negligence, strict or absolute liability and
liability in tort), damages, expenses, obligations, penalties, actions,
judgments, Liens, penalties, fines, suits, costs or disbursements of any kind or
nature whatsoever (including Attorney Costs in connection with any Proceeding
commenced or threatened, whether or not such Person shall be designated a party
thereto) at any time (including following the payment of the Obligations and/or
the termination of the Commitments hereunder) incurred by, imposed on or
asserted against such Person.
Majority Lenders of the Affected Tranche means (i) at any time prior
to the Closing Date, Non-Defaulting Lenders holding at least a majority of the
aggregate amount of the Commitments of the Non-Defaulting Lenders of the
applicable Term Loan Facility which would be adversely affected by any
amendment, waiver or consent contemplated by clause (vi) of the second proviso
to subsection 11.1(a) and (ii) at any time after the Closing Date,
Non-Defaulting Lenders holding at least a majority of the aggregate amount of
the outstanding Loans of the Non-Defaulting Lenders of the applicable Term Loan
Facility which would be adversely affected by any amendment, waiver or consent
contemplated by clause (vi) of the second proviso to subsection 11.1(a).
Management Services Agreement means the Management Services
Agreement dated October [ ], 1996, between AEA and US Borrower, as in effect on
the Closing Date and as the same may be amended and in effect from time to time
in accordance with Section 8.18.
Margin Stock means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
Material Adverse Effect means (a) a material adverse effect upon the
operations, business, assets, nature of assets, properties, condition (financial
or otherwise), solvency or prospects of US Borrower and the Subsidiaries taken
as a whole (which term "Subsidiary" shall include, on or prior to the Closing
Date, any entity which will become or be merged into either Borrower or any of
its Subsidiaries on the Closing Date in connection with the Transactions); or
(b) a material adverse effect on the rights and remedies of the Agents or the
Lenders under the Loan Documents.
Mettler-Toledo Group means the entities (other than those affiliated
solely with Holding immediately prior to the consummation of the M-T
Acquisition) set forth in the M-T Acquisition Documents and any additional
entities formed by such parties or their Affiliates in connection with
consummating the M-T Acquisition.
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Minimum Tranche means, in respect of Loans comprising part of the
same Borrowing, or to be converted or continued under Section 2.4, (a) in the
case of ABR Loans, U.S. $1 million or a higher integral multiple of U.S. $1
million, (b) in the case of Offshore Rate Committed Loans (other than Revolving
Loans and Tranche A Term Loans), a minimum Dollar Equivalent amount of U.S. $5
million and an integral multiple of U.S. $ 1 million, (c) in the case of
Revolving Loans which are Offshore Rate Committed Loans, a minimum Dollar
Equivalent amount of U.S. $1 million and an integral multiple of U.S. $1
million, (d) in the case of Tranche A-1 Term Loans, a minimum amount of 5
million units of the Applicable Currency and an integral multiple of 1 million
units of the Applicable Currency and (e) in the case of Tranche A-2 Term Loans,
a minimum amount of 5 million units of the Applicable Currency and an integral
multiple of 1 million units of the Applicable Currency.
Moody's means Moody's Investors Service, Inc. or its successors.
Mortgage means a term loan and revolving credit mortgage, assignment
of leases, security agreement and fixture filing, or a term loan and revolving
credit deed of trust, assignment of leases, security agreement and fixture
filing creating and evidencing a Lien on a Mortgaged Real Property, which shall
be substantially in the form of Exhibit I-1 or I-2 (as appropriate) hereto,
containing such schedules and including such additional provisions and other
deviations from such Exhibits as shall be necessary to conform such document to
applicable or local law or as shall be required under local law and which shall
be dated as of the date of delivery thereof and made by the owner of the
Mortgaged Real Property described therein for the benefit of the Administrative
Agent, as mortgagee (grantee or beneficiary), assignee and secured party, as the
same may at any time be amended, modified or supplemented in accordance with the
terms thereof and hereof.
Mortgaged Real Property means each Real Property designated on
Schedule 1.1[ ] which shall be subject to a Mortgage and each additional Real
Property which shall be subject to a Mortgage delivered pursuant to Section 7.14
or 7.15.
M-T Acquisition means the acquisition by US Borrower or one or more
of the Subsidiaries of the Mettler-Toledo Group pursuant to the M-T Acquisition
Documents.
M-T Acquisition Documents means the documents listed in Schedule
1.1[ ] hereto, in each case as in effect on the date hereof and as amended and
in effect from time to time in accordance with Section 8.18.
MT Investors means MT Investors Inc., a Delaware corporation, and
any successors thereto.
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Multiemployer Plan means a "multiemployer plan," within the meaning
of Section 4001(a)(3) of ERISA, to which a Loan Party or any ERISA Affiliate
makes, is making or is obligated to make contributions or with respect to which
it otherwise may have any liability.
Net Award has the meaning assigned to that term in each Mortgage.
Net Cash Proceeds means
(a) with respect to any Asset Sale, the aggregate cash proceeds
(including cash proceeds received by way of deferred payment of principal
pursuant to a note, installment receivable, liquidation or payment of any
Investment permitted by subsection 8.4(d), reserve for adjustment or
otherwise, but only as and when received) received by US Borrower or any
Subsidiary pursuant to such Asset Sale, net of (i) the direct and indirect
costs relating to such Asset Sale (including sales commissions and legal,
accounting and investment banking fees), (ii) taxes, fees, impositions and
recording charges paid or payable as a result thereof (after taking into
account any tax credits or deductions taken in connection with such Asset
Sale and any tax sharing arrangements), (iii) amounts applied to the
repayment of any Indebtedness secured by a Lien on the asset subject to
such Asset Sale (other than the Obligations), (iv) liabilities of the
entity, or relating to the business or assets, sold, transferred or
otherwise disposed of which are retained by US Borrower or the applicable
Subsidiary, (v) amounts required to be paid to any Person (other than US
Borrower or any Subsidiary) owning a beneficial interest in the assets
subject to the Asset Sale and (vi) appropriate amounts to be provided by
US Borrower or any Subsidiary, as the case may be, as a reserve required
in accordance with GAAP against any liabilities associated with such Asset
Sale and retained by the US Borrower or any Subsidiary, as the case may
be, after such Asset Sale (but upon reversal of such reserve, any amount
so reserved shall thereupon be Net Cash Proceeds);
(b) with respect to any issuance of equity securities or
Indebtedness, the aggregate cash proceeds (including cash proceeds
received by way of deferred payment of principal pursuant to a note,
installment receivable, reserve for adjustment or otherwise, but only as
and when received) received by Holding or any of its Subsidiaries pursuant
to such issuance, net of the direct costs relating to such issuance
(including sales and underwriter's commissions and legal, accounting and
investment banking fees); and
(c) with respect to any Taking, Destruction, or loss of title to all
or a portion of any Mortgaged Real Property, the Net Award, Net Proceeds
or title insurance proceeds (net of any reasonable costs incurred to
recover such title insurance proceeds), as applicable, resulting
therefrom, to be applied as Net Cash Proceeds under this Agreement
<PAGE>
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pursuant to the provisions of the Mortgages; provided, however, such
amounts have not been applied to restore or rebuild the Mortgaged Real
Property so Taken or Destroyed as permitted or required by the applicable
Mortgage.
If Holding or any of its Subsidiaries receives Net Cash Proceeds in
a currency other than U.S. Dollars, the Dollar Equivalent amount thereof shall
be determined as of the earlier of (i) the date on which such Net Cash Proceeds
are required to be applied to prepayments under Section 2.7 and (ii) the date on
which such Net Cash Proceeds are converted into the currency in which any such
prepayment will be required.
Net Proceeds has the meaning assigned to that term in each Mortgage.
Net Tangible Assets means, at any time, the aggregate amount which,
in accordance with GAAP, would be included as total assets (less intangible
assets) on the consolidated balance sheet of US Borrower and the Subsidiaries at
such time, minus the aggregate amount which, in accordance with GAAP, would be
included as Current Liabilities on the consolidated balance sheet of US Borrower
and the Subsidiaries at such time.
Non-Defaulting Lender means each Lender other than a Defaulting
Lender.
Non-Guarantor Subsidiary means any Subsidiary set forth on Schedule
1.1[ ].
Non-U.S. $ Swing Line Loans means any Swing Line Loan that is not
made in U.S. Dollars.
Notes means the Tranche A-1 Term Notes, the Tranche A-2 Term Notes,
the Tranche B Term Notes, the Tranche C(CH) Term Notes, the Tranche C(US) Term
Notes, the Tranche D Term Notes, the Revolving Notes and the Swing Line Note.
Notice of Committed Borrowing means a notice in substantially the
form of Exhibit A.
Notice of Conversion/Continuation means a notice in substantially
the form of Exhibit B (in the case of a notice pursuant to Section 2.4).
Obligations means all advances, debts, liabilities, obligations,
guarantees, covenants and duties arising under any Loan Document, owing by any
Loan Party to any Lender, any Agent or any Indemnified Person, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising.
<PAGE>
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Officers' Certificate shall mean, as applied to any corporation, a
certificate executed on behalf of such corporation by its Chairman of the Board
(if an officer) or its President or one of its Vice Presidents and by its Chief
Financial Officer or its Treasurer or, in the case of Foreign Subsidiaries,
officers or persons performing comparable functions. Each Officers' Certificate
with respect to the compliance with a condition precedent or agreement hereunder
shall include (i) a statement that the signers have read such condition or
agreement and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers, they
have made or have caused to be made such examination or investigation as is
reasonably necessary to enable them to express an opinion as to whether or not
such condition or agreement has been complied with, and (iii) a statement as to
whether, in the opinion of the signers, based upon such examination or
investigation, such condition or agreement has been complied with.
Offshore Currency means at any time Deutschemarks, French Francs,
Japanese Yen, Pounds Sterling, Swiss Francs or any Agreed Alternative Currency.
Offshore Currency Loan means any Offshore Rate Committed Loan
denominated in an Offshore Currency.
Offshore Rate means, with respect to each day during each Interest
Period pertaining to Offshore Rate Committed Loans comprising part of the same
Borrowing, the rate per annum determined by the Administrative Agent to be the
arithmetic mean (rounded to the nearest 1/100th of 1%) of the offered rates for
deposits in Dollars or in the Applicable Currency with a term comparable to such
Interest Period that appears on the Telerate British Bankers Assoc. Interest
Settlement Rates Page (as defined below) at approximately 11:00 a.m., London
time, on the second full Business Day preceding the first day of such Interest
Period (or, in the case of Pounds Sterling, on the first day of such Interest
Period); provided, however, that if there shall at any time no longer exist a
Telerate British Bankers Assoc. Interest Settlement Rates Page, "Eurocurrency
Base Rate" shall mean, with respect to each day during each Interest Period
pertaining to Offshore Rate Committed Loans comprising part of the same
Borrowing, the rate per annum equal to the rate at which Scotiabank is offered
deposits in Dollars or in the Applicable Currency at approximately 11:00 a.m.,
London time, two Business Days prior to the first day of such Interest Period
(or, in the case of Pounds Sterling, on the first day of such Interest Period)
in the interbank eurocurrency market where the eurocurrency and foreign currency
and exchange operations in respect of Dollars or such Applicable Currency, as
the case may be, are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of its Offshore Rate Committed Loan to be outstanding
during such Interest Period. "Telerate British Bankers Assoc. Interest
Settlement Rates Pate" shall mean the display designated as Page 3750 (or such
other page on which any Applicable Currency then appears) on the Telerate System
Incorporated
<PAGE>
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Service (or such other page as may replace such page on such service for the
purpose of displaying the rates at which Dollar deposits in any Applicable
Currency are offered by leading banks in the London interbank deposit market).
Offshore Rate Committed Loan means any Committed Loan that bears
interest based on the Offshore Rate.
Offshore U.S. Dollar Loan means any Offshore Rate Committed Loan
denominated in U.S. Dollars.
Operating Lease Expense means all operating lease expenses of US
Borrower and the Subsidiaries.
Organization Documents means, for any corporation, the certificate
or articles of incorporation or association, the bylaws, any certificate of
determination or instrument relating to the rights of preferred shareholders of
such corporation, any shareholder rights agreement or voting trust agreement,
and all applicable resolutions of the board of directors (or any committee
thereof) of such corporation and all other documents of a comparable nature and,
for each partnership, its partnership agreement, its certificate of partnership
and all other documents of the nature previously described as to a corporation.
Other Documents means the Ciba Loan Documents, the Ciba
Reimbursement Agreement, the Tax Sharing Agreement, the Management Services
Agreement and the Existing Affiliate Agreements and all other documents,
instruments and agreements entered into in connection with such documents
including all appendices, annexes, schedules, attachments and exhibits to any
such document.
Overnight Rate means, for any day, the rate of interest per annum at
which overnight deposits in the Applicable Currency, in an amount approximately
equal to the amount with respect to which such rate is being determined, would
be offered for such day by the Administrative Agent's London Branch to major
banks in the London or other applicable offshore interbank market. The Overnight
Rate for any day which is not a Business Day shall be the Overnight Rate for the
preceding Business Day.
Participant -- see subsection 11.7(d).
PBGC means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under ERISA.
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Pension Plan means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code which a Loan Party or any ERISA Affiliate sponsors
or maintains, or to which it makes, is making or is obligated to make
contributions, or with respect to which it otherwise may have any liability.
Permitted Liens -- see Section 8.1.
Person means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.
Plan means an employee benefit plan (as defined in Section 3(3) of
ERISA) which a Loan Party or any ERISA Affiliate sponsors or maintains or to
which a Loan Party or any ERISA Affiliate makes, is making or is obligated to
make contributions or with respect to which it otherwise may have any liability,
and includes any Pension Plan.
Pledged Securities means all the Security Agreement Collateral as
defined in each of the Securities Pledge Agreements.
Pounds Sterling means the lawful money of the United Kingdom.
Prior Liens means Liens which pursuant to the provisions of any
Security Document are or may be superior to the Liens of such Security Document.
Proceeding means any claim, action, judgment, suit, hearing,
governmental investigation, arbitration (to the extent binding on US Borrower or
any Subsidiary) or proceeding, including by or before any Governmental
Authority.
Pro Rata Share means as to any Lender in respect of any Facility at
any time, the percentage equivalent (expressed as a decimal, rounded to the
ninth decimal place) at such time of (a) prior to termination of the Commitments
in such Facility, (i) such Lender's Commitment in such Facility divided by (ii)
the combined Commitments of all Lenders in such Facility, or (b) after
termination of the Commitments in such Facility, (i) the aggregate principal
Dollar Equivalent amount of such Lender's Loans under such Facility, plus (in
the case of the Revolving Facility) (without duplication) the participation of
such Lender in the aggregate Effective Amount of all L/C Obligations and all
Swing Line Loans, divided by (ii) the aggregate Dollar Equivalent principal
amount of all Loans under such Facility, plus (in the case of the Revolving
Facility) (without duplication) the Effective Amount of all L/C Obligations.
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Qualified Subsidiary Guarantor means any Subsidiary Guarantor which
has guaranteed pursuant to a Subsidiary Guarantee all Obligations of either
Borrower.
Real Property means all right, title and interest of the Borrowers
or any of their respective Subsidiaries (including, without limitation, any
leasehold estate) in and to a parcel of real property owned or operated by
either Borrower or any of its respective Subsidiaries together with, in each
case, all improvements and appurtenant fixtures, equipment, personal property,
easements and other property and rights incidental to the ownership, lease or
operation thereof.
Reimbursement Obligations shall mean, at any time, the obligations
of the Borrowers then outstanding, or that may thereafter arise in respect of
all Letters of Credit then outstanding, to reimburse amounts paid by the L/C
Lender in respect of any drawings under a Letter of Credit.
Related Business means the businesses of US Borrower and the
Subsidiaries as conducted on the Closing Date, and any businesses related,
ancillary or complementary to such businesses.
Replacement Lender -- see Section 4.8.
Reportable Event means any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder with respect to which a Loan
Party or any ERISA Affiliate would be subject to the notice requirements of
Section 4043(b), other than any such event for which the 30-day notice
requirement under ERISA has been waived in regulations issued by the PBGC.
Required Lenders means Non-Defaulting Lenders then holding at least
a majority of the sum of (i) the then aggregate unused amount of the Commitments
of the Non-Defaulting Lenders, plus (ii) the then aggregate unpaid Dollar
Equivalent principal amount of the Loans of the Non-Defaulting Lenders, plus
(iii) (without duplication) the then aggregate Effective Amount of the L/C
Obligations of the Non-Defaulting Lenders. For purposes of determining whether
the Required Lenders have approved any amendment, waiver or consent or taken any
other action hereunder, the Dollar Equivalent amount of all Offshore Currency
Loans shall be calculated on the date immediately preceding the date such
amendment, waiver or consent is to become effective or such action is to be
taken.
Required Revolving Facility Lenders means (a) at any time prior to
the Termination Date, Revolving Facility Lenders which are Non-Defaulting
Lenders then holding at least a majority of the sum of (i) the then aggregate
Available Revolving Facility Commitments of all Revolving Facility Lenders which
are Non-Defaulting Lenders, plus (ii) the then Aggregate Outstanding Revolving
Credit of all Revolving Facility Lenders which are Non-
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Defaulting Lenders, and (b) otherwise, Revolving Facility Lenders which are
Non-Defaulting Lenders then holding at least a majority of the then Aggregate
Outstanding Revolving Credit of all Revolving Facility Lenders which are
Non-Defaulting Lenders. For purposes of determining whether the Required
Revolving Facility Lenders have approved any amendment, waiver or consent or
taken any other action hereunder, the Dollar Equivalent amount of all Offshore
Currency Loans shall be calculated on the date immediately preceding the date
such amendment, waiver or consent is to become effective or such action is to be
taken.
Requirement of Law means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
Reset Date -- see definition of Applicable Margin.
Responsible Officer means the chief executive officer, the chief
financial officer, the president or any vice-president of the applicable
Borrower, or any other officer having substantially the same authority and
responsibility; or, with respect to compliance with financial covenants, the
chief financial officer, the treasurer or controller of the applicable Borrower,
or any other officer having substantially the same authority and responsibility.
Restoration has the meaning assigned to that term in each Mortgage.
Restricted Payment -- see Section 8.13.
Revolving Facility means the revolving multicurrency credit facility
in an aggregate principal amount equal to the Dollar Equivalent of U.S. $140
million with a letter of credit subfacility and a swing line subfacility
provided hereunder as set forth in subsection 2.1(e) and Sections 2.16 and 3.1.
Revolving Facility Commitment -- see subsection 2.1(e).
Revolving Facility Lender means a lender having a Revolving Facility
Commitment or a Swing Line Commitment or holding a Revolving Facility Loan or a
participation in an L/C Advance.
Revolving Facility Loan means an extension of credit by a Revolving
Facility Lender to a Borrower or a Subsidiary Swing Line Borrower under the
Revolving Facility pursuant to Article II or Article III, which may be a
Revolving Loan, a Swing Line Loan or an L/C Advance.
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Revolving Loan -- see subsection 2.1(e).
Revolving Loan Maturity Date means December 31, 2002.
Revolving Note and Revolving Notes -- see Section 2.2.
Same Day Funds means (i) with respect to disbursements and payments
in U.S. Dollars, immediately available funds, and (ii) with respect to
disbursements and payments in an Offshore Currency, same day or other funds as
may be determined by the Administrative Agent to be customary in the place of
disbursement or payment for the settlement of international banking transactions
in the relevant Offshore Currency.
Scotiabank -- see the introduction to this Agreement.
SEC means the United States Securities and Exchange Commission, or
any Governmental Authority succeeding to any of its principal functions.
Section 4.1(f)(i) Certificate -- see subsection 4.1(f)(i).
Section 4.1(f)(v) Certificate -- see subsection 4.1(f)(v).
Secured Parties has the meaning specified in the Security Documents.
Securities Pledge Agreements means the U.S. Borrower Securities
Pledge Agreement, the Parent Securities Pledge Agreement, the Domestic
Subsidiaries Securities Pledge Agreement and the Foreign Subsidiary Securities
Pledge Agreement and any other securities pledge agreements delivered pursuant
to Section 7.14 or Section 7.15.
Security Agreement means a security agreement substantially in the
form of Exhibit D hereto entered into and delivered by each of the Borrowers and
the Subsidiary Guarantors.
Security Agreement Collateral means all "Collateral" as defined in
the Security Agreement.
Security Documents means each of the Securities Pledge Agreements,
Security Agreements, the Mortgages and any other documents utilized to pledge as
Collateral for the Obligations any other property or assets of whatever kind or
nature.
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Senior Subordinated Note Documents shall mean and include each of
the documents and other agreements entered into (including, without limitation,
the Senior Subordinated Note Indenture) relating to the issuance by US Borrower
of the Senior Subordinated Notes, as in effect on the Closing Date and as the
same may be entered into, modified, supplemented or amended from time to time
pursuant to the terms hereof and thereof.
Senior Subordinated Note Indenture shall mean the Indenture, dated
as of October [ ], 1996, entered into by and among US Borrower, Holding and
United States Trust Company of New York, as trustee thereunder, as in effect on
the Closing Date and as the same may be modified, amended or supplemented from
time to time in accordance with the terms hereof and thereof.
Senior Subordinated Notes means the U.S. $[115] million [ ]% senior
subordinated notes due 2006 of US Borrower issued under the Senior Subordinated
Note Indenture.
S&P means Standard & Poor's Corporation.
Specified Subsidiary means any Non-Guarantor Subsidiary or any
Subsidiary set forth on Schedule 7.22.
Spot Rate means with respect to any Applicable Currency, at any date
of determination thereof, the spot rate of exchange for such date in London that
appears on the display page applicable to such Applicable Currency on the
Telerate System Incorporated Service (or such other page as may replace such
page on such service for the purpose of displaying the spot rate of exchange in
London); provided, however, that if there shall at any time no longer exist such
a page on such service, the spot rate of exchange shall be determined by
reference to another similar rate publishing service selected by the
Administrative Agent and if no such similar rate publishing service is available
by reference to the published rate of the Administrative Agent in effect at such
date for similar commercial transactions.
State, Local and Foreign Real Property Disclosure Requirements means
any state or local laws requiring notification of the buyer of real property, or
notification, registration, or filing to or with any state or local agency,
prior to the sale of any real property or transfer of control of an
establishment, of the actual or threatened presence or release into the
environment, or the use, disposal, or handling of Hazardous Materials on, at,
under, or near the real property to be sold or the establishment for which
control is to be transferred.
Subsidiary of a Person means any corporation, association,
partnership, limited liability company, joint venture, business trust or other
business entity of which more than 50%
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of the voting stock, membership interests or other equity interests is owned or
controlled directly or indirectly by such Person, or one or more of the
Subsidiaries of such Person, or a combination thereof. Notwithstanding the
foregoing, any Joint Venture which is not majority owned by, but is controlled
by, US Borrower or a Subsidiary and the financial results of which are included
in the consolidated financial statements of US Borrower shall be deemed to be a
Subsidiary of US Borrower. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of US Borrower.
Subsidiary Guarantees means each Domestic Subsidiary Guarantee and
each Foreign Subsidiary Guarantee.
Subsidiary Guarantors means the Domestic Subsidiary Guarantors and
the Foreign Guarantors.
Subsidiary Swing Line Borrowers means each of the following
Subsidiaries: Garvens Automation GmbH, Giessen, a German corporation;
Mettler-Toledo GmbH, Giessen, a German corporation; Mettler-Toledo S.A.,
Veroflay, a French corporation; Mettler-Toledo K.K., Takarazuka, a Japanese
corporation; Mettler-Toledo B.V., Tiel, a Netherlands corporation;
Mettler-Toledo (Albstadt) GmbH, Albstadt, a German corporation; and
Mettler-Toledo AG, Greifensee, a Swiss corporation, and each of their respective
successors.
Subsidiary Swing Line Borrower Sublimit means the Dollar Equivalent
amounts set forth opposite such Subsidiary's name in the table below:
================================================================================
Name of Subsidiary U.S.$
================================================================================
Garvens Automation GmbH, Giessen
- --------------------------------------------------------------------------------
Mettler-Toledo GmbH, Giessen
- --------------------------------------------------------------------------------
Mettler-Toledo S.A., Veroflay
- --------------------------------------------------------------------------------
Mettler-Toledo K.K., Takarazuka
- --------------------------------------------------------------------------------
Mettler-Toledo B.V., Tiel
- --------------------------------------------------------------------------------
Mettler-Toledo (Albstadt) GmbH, Albstadt
- --------------------------------------------------------------------------------
Mettler-Toledo AG, Greifensee
================================================================================
Surety Instruments means all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, surety bonds and similar
instruments.
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Survey means a survey of any Mortgaged Real Property (and all
improvements thereon): (i) prepared by a surveyor or engineer licensed to
perform surveys in the state, province or country where such Mortgaged Real
Property is located, (ii) dated (or redated) not earlier than six months prior
to the date of delivery thereof unless there shall have occurred within the six
months prior to such date of delivery any exterior construction on the site of
such Mortgaged Real Property, in which event such survey shall be dated (or
redated) after the completion of such construction or if such construction shall
not have been completed as of such date of delivery, not earlier than 20 days
prior to such date of delivery, (iii) certified by the surveyor (in a manner
reasonably acceptable to the Administrative Agent) to the Administrative Agent
and the Title Company and (iv) complying in all material respects with the
minimum detail requirements of the American Land Title Association as such
requirements are in effect on the date of preparation of such survey; provided,
however, that such survey is in a form reasonably acceptable to the Title
Company.
Swap Contract means any agreement (including any master agreement
and any agreement, whether or not in writing, relating to any single
transaction) that is an interest rate swap agreement, basis swap, forward rate
agreement, commodity swap, commodity option, equity or equity index swap or
option, bond option, interest rate option, foreign exchange agreement, rate cap,
collar or floor agreement, currency swap agreement, cross-currency rate swap
agreement, swaption, currency option or any other, similar agreement (including
any option to enter into any of the foregoing).
Swing Line Borrowers means the Borrowers and the Subsidiary Swing
Line Borrowers.
Swing Line Commitment means the commitment of each Swing Line Lender
to make Swing Line Loans hereunder in an aggregate Dollar Equivalent amount not
to exceed on any date an amount equal to the lesser of U.S. $25 million and the
amount of the combined Commitments of all Swing Line Lenders, it being
understood that the Swing Line Commitment is a part of the combined Revolving
Facility Commitments of all Swing Line Lenders, rather than a separate
independent commitment.
Swing Line Lender means each of Credit Suisse and Scotiabank in its
capacity as a swing line lender hereunder and Swing Line Lenders means both of
them.
Swing Line Loan -- see Section 2.16.
Swing Line Note and Swing Line Notes -- see Section 2.2.
Swiss Francs and CHF each mean lawful money of Switzerland.
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Taking has the meaning assigned to that term in each Mortgage.
Tax Sharing Agreement means the Tax Sharing Agreement dated October
[ ], 1996 among [ ], as amended and in effect from time to time in accordance
with Section 8.18.
Taxes means any and all present or future income, stamp,
documentary, excise, property or other taxes, levies, imposts, duties,
deductions, charges, fees or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, and all
liabilities with respect thereto, including any present or future Taxes or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document.
Termination Date means the earlier to occur of (i) the date 30
Business Days prior to the Revolving Loan Maturity Date and (ii) the date on
which the Revolving Facility Commitments are terminated or reduced to zero
pursuant to Section 2.6.
Term Loan Commitments means the Tranche A-1 Commitments, the Tranche
A-2 Commitments, the Tranche B Commitments, the Tranche C(CH) Commitments, the
Tranche C(US) Commitments and the Tranche D Commitments of all the Lenders
having such commitments.
Term Loan Facilities means the Tranche A-1 Term Loan Facility, the
Tranche A-2 Term Loan Facility, the Tranche B Term Loan Facility, the Tranche
C(CH) Term Loan Facility, the Tranche C(US) Term Loan Facility and the Tranche D
Term Loan Facility.
Term Loans means the loans made under the Term Loan Facilities.
Title Company shall mean First American Title Insurance Company or
such other title insurance or abstract company as shall be designated by the
Required Lenders.
Tranche A Term Loan Facilities means the Tranche A-1 Term Loan
Facility and the Tranche A-2 Term Loan Facility.
Tranche A Term Loans means the loans made under the Tranche A-1 Term
Loan Facility and the Tranche A-2 Term Loan Facility.
Tranche A-1 Commitment means a Lender's commitment to make a Tranche
A-1 Term Loan hereunder.
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Tranche A-1 Lender means a Lender having a Tranche A-1 Commitment.
Tranche A-1 Term Loan -- see subsection 2.1(a).
Tranche A-1 Term Loan Facility means the term loan facility in an
aggregate principal amount of [currency and amount].
Tranche A-1 Term Loan Maturity Date means December 31, 2002.
Tranche A-1 Term Note and Tranche A-1 Term Notes -- see Section 2.2.
Tranche A-2 Commitment means a Lender's commitment to make a Tranche
A-2 Term Loan hereunder.
Tranche A-2 Lender means a Lender having a Tranche A-2 Commitment.
Tranche A-2 Term Loan -- see subsection 2.1(a).
Tranche A-2 Term Loan Facility means the term loan facility in an
aggregate principal amount of [currency and amount].
Tranche A-2 Term Loan Maturity Date means December 31, 2002.
Tranche A-2 Term Note and Tranche A-2 Term Notes -- see Section 2.2.
Tranche B Facility Commitment means a Lender's commitment to make a
Tranche B Term Loan hereunder.
Tranche B Lender means a Lender having a Tranche B Facility
Commitment.
Tranche B Term Loan -- see subsection 2.1(b).
Tranche B Term Loan Facility means the term loan facility in an
aggregate principal amount of U.S. $[75] million.
Tranche B Term Loan Maturity Date means December 31, 2003.
Tranche B Term Note and Tranche B Term Notes -- see Section 2.2.
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Tranche C Term Loans means loans made under the Tranche C(CH) Term
Loan Facility and the Tranche C(US) Term Loan Facility.
Tranche C(CH) Facility Commitment means a Lender's commitment to
make a Tranche C(CH) Loan hereunder.
Tranche C(CH) Lender means a Lender having a Tranche C(CH) Facility
Commitment.
Tranche C(CH) Term Loan -- see subsection 2.1(c).
Tranche C(CH) Term Loan Facility means the term loan facility in an
aggregate principal amount of U.S. $[40] million.
Tranche C(CH) Term Loan Maturity Date means December 31, 2004.
Tranche C(CH) Term Note and Tranche C(CH) Term Notes -- see Section
2.2.
Tranche C(US) Facility Commitment means each Lender's commitment to
make a Tranche C(US) Loan hereunder.
Tranche C(US) Lender means each Lender having a Tranche C(US)
Facility Commitment.
Tranche C(US) Term Loan -- see subsection 2.1(c).
Tranche C(US) Term Loan Facility means the term loan facility in an
aggregate principal amount of U.S. $[40] million.
Tranche C(US) Term Loan Maturity Date means December 31, 2004.
Tranche C(US) Term Note and Tranche C(US) Term Notes -- see Section
2.2.
Tranche D Facility Commitment means a Lender's commitment to make a
Tranche D Loan hereunder.
Tranche D Lender means a Lender having a Tranche D Facility
Commitment.
Tranche D Term Loan -- see subsection 2.1(e).
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Tranche D Term Loan Facility means the term loan facility in an
aggregate principal amount of U.S. $[20] million.
Tranche D Term Loan Maturity Date means June 30, 2005.
Tranche D Term Loans means loans made under the Tranche D Term Loan
Facility.
Tranche D Term Note and Tranche D Term Notes -- see Section 2.2.
Transaction Documents means the M-T Acquisition Documents, the
Senior Subordinated Note Documents, the documents and instruments entered into
in connection with the Equity Issuance and each other document (other than the
Loan Documents) relating to the Transactions including all appendices, annexes,
schedules, attachments and exhibits to any such document.
Transactions means the M-T Acquisition, the offering and sale of the
Senior Subordinated Notes and the other transactions contemplated hereby, and
thereby to be effected in connection therewith.
Type of Loan means an ABR Loan or an Offshore Rate Committed Loan.
UCC means the Uniform Commercial Code as in effect in the State of
New York.
Unfunded Pension Liability means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA over the fair market
value of such Plan's assets (including all accrued contributions required to be
made to the Plan in respect of the applicable plan year), determined in
accordance with the actuarial assumptions used for funding such Plan pursuant to
Section 412 of the Code for the applicable plan year.
Unmatured Event of Default means any event or circumstance which,
with the giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
US Borrower Guarantee means the guarantee agreement substantially in
the form of Exhibit E-5 entered into and delivered by US Borrower.
US Borrower Securities Pledge Agreement means a securities pledge
agreement substantially in the form of Exhibit J-4 entered into and delivered by
US Borrower.
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U.S. Dollars and U.S. $ each mean lawful money of the United States.
U.S. Federal Funds Rate means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative Agent.
Wholly-Owned Subsidiary means, for any Person, any corporation in
which (other than directors' qualifying shares required by law) 100% of the
capital stock of each class having ordinary voting power, and 100% of the
capital stock of each other class, at the time as of which any determination is
being made, is owned, beneficially and of record, by such Person, or by one or
more of the other Wholly-Owned Subsidiaries, or a combination thereof.
1.2. Other Interpretive Provisions. (a) The meanings of defined
terms are equally applicable to the singular and plural forms of the defined
terms.
(b) The words "hereof," "herein," "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Article, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(c)(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including"; the words
"to" and "until" each mean "to but excluding," and the word "through" means "to
and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and
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(ii) references to any statute or regulation are to be construed as including
all statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agents, the
Borrowers and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or any Agent merely
because of an Agent's or Lenders' involvement in their preparation.
1.3. Accounting Principles. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied; provided, however, that if the
Borrowers notify the Administrative Agent that the Borrowers wish to amend any
covenant in Article VIII to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the
Borrowers that the Required Lenders wish to amend Article VIII for such
purpose), then the Borrowers' compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrowers and the Required Lenders.
(b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of US Borrower.
1.4. Currency Equivalents Generally. For all purposes of this
Agreement (but not for purposes of the preparation of any financial statements
delivered pursuant hereto), the equivalent in any Offshore Currency or other
currency of an amount in U.S. Dollars, and the equivalent in U.S. Dollars of an
amount in any Offshore Currency or other currency, shall be determined at the
Spot Rate.
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1.5. Principle of Deemed Reinvestment. Except to the extent
permitted under applicable law, all calculations of interest and fees hereunder
are to be made on the basis of the nominal interest rate set forth herein and
not using the effective rate method of calculation or on any basis which gives
effect to the principle of deemed reinvestment.
ARTICLE II.
THE CREDITS
2.1. Amounts and Terms of Commitments. (a) Each Tranche A-1 Lender
severally agrees, on the terms and conditions set forth herein, to make a single
loan to CH Borrower (each such loan, a "Tranche A-1 Term Loan") on the Closing
Date in an amount not to exceed such Lender's Pro Rata Share of [currency and
amount]. The Tranche A-1 Commitment of each Tranche A-1 Lender is set forth on
Schedule 2.1 opposite such Lender's name under the heading "Tranche A-1
Commitments." Each Tranche A-2 Lender severally agrees, on the terms and
conditions set forth herein, to make a single loan (each such loan, a "Tranche
A-2 Term Loan") on the Closing Date in an amount not to exceed such Lender's Pro
Rata Share of [currency and amount]. The Tranche A-2 Commitment of each Tranche
A-2 Lender is set forth on Schedule 2.1 opposite such Lender's name under the
heading "Tranche A-2 Commitments." In no event shall the Dollar Equivalent of
the Tranche A Term Loans made on the Closing Date exceed U.S. $[100] million.
(b) Each Tranche B Lender severally agrees, on the terms and
conditions set forth herein, to make a single loan, in U.S. Dollars, to US
Borrower (each such loan, a "Tranche B Term Loan") on the Closing Date in an
amount not to exceed such Lender's Pro Rata Share of U.S. $[75] million. The
Tranche B Commitment of each Tranche B Lender is set forth on Schedule 2.1
opposite such Lender's name under the heading "Tranche B Commitments."
(c) Each Tranche C(CH) Lender severally agrees, on the terms and
conditions set forth herein, to make a loan, in U.S. Dollars, to CH Borrower
(each such loan, a "Tranche C(CH) Term Loan") on the Closing Date in an amount
not to exceed such Lender's Pro Rata Share of U.S. $[40] million. The Tranche
C(CH) Commitment of each Tranche C(CH) Lender is set forth on Schedule 2.1
opposite such Lender's name under the heading "Tranche C(CH) Commitments." Each
Tranche C(US) Lender severally agrees, on the terms and conditions set forth
herein, to make a single loan, in U.S. Dollars, to US Borrower (each such loan,
a "Tranche C(US) Term Loan") on the Closing Date in an amount not to exceed such
Lender's Pro Rata Share of U.S.$ [40] million. The Tranche C(US) Commitment of
each
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Tranche C(US) Lender is set forth on Schedule 2.1 opposite such Lender's name
under the heading "Tranche C(US) Commitments."
(d) Each Tranche D Lender severally agrees, on the terms and
conditions set forth herein, to make a loan, in U.S. Dollars, to US Borrower
(each such Loan, a "Tranche D Term Loan") on the Closing Date in an amount not
to exceed such Lender's Pro Rata Share of U.S. $[20] million. The Tranche D
Commitment of each Tranche D Lender is set forth on Schedule 2.1 opposite such
Lender's name under the heading "Tranche D Commitments."
(e) Each Revolving Facility Lender severally agrees, on the terms
and conditions set forth herein, to make loans to the Borrowers (each such loan,
a "Revolving Loan") from time to time on any Business Day during the period from
the Closing Date to the Termination Date, in an aggregate amount not to exceed
at any time outstanding the amount set forth opposite such Lender's name under
the heading "Revolving Facility Commitment" on Schedule 2.1 (such amount, as
reduced pursuant to Section 2.6 or changed as a result of one or more
assignments under Section 4.8 or 11.8, such Lender's "Revolving Facility
Commitment") and in such currencies as the Borrowers may request pursuant to
Section 2.3(E); provided, however, that Borrowings of Revolving Loans on the
Closing Date (i) shall be made only by CH Borrower and (ii) shall in no event
exceed U.S. $75 million; provided, further, however, that after giving effect to
any Borrowing of Revolving Loans, the aggregate principal Dollar Equivalent
amount of all outstanding Revolving Loans, plus the aggregate principal Dollar
Equivalent amount of all outstanding Swing Line Loans, plus (without
duplication) the Effective Amount of all L/C Obligations shall not exceed the
combined Revolving Facility Commitments of all Revolving Facility Lenders;
provided, further, still, however, that the Aggregate Outstanding Revolving
Credit of any Revolving Facility Lender shall not at any time exceed such
Lender's Revolving Facility Commitment. Within the limits of each Revolving
Facility Lender's Revolving Facility Commitment, and subject to the other terms
and conditions hereof, the Borrowers may borrow under this subsection 2.1(e),
prepay under Section 2.7, and reborrow under this subsection 2.1(e).
(f) Amounts which are borrowed as Term Loans which are repaid or
prepaid may not be reborrowed.
2.2. Notes. The applicable Borrower's and the applicable Subsidiary
Swing Line Borrower's obligation to pay the principal of, and interest on, all
the Loans made to it by each Lender shall be evidenced (i) if Tranche A-1 Term
Loans, by a promissory note substantially in the form of Exhibit H-1, with
blanks appropriately completed (each, a "Tranche A-1 Term Note" and,
collectively, the "Tranche A-1 Term Notes"), (ii) if Tranche A-2 Term Loans, by
a promissory note substantially in the form of Exhibit H-2, with blanks
appropriately completed (each, a "Tranche A-2 Term Note" and, collectively, the
"Tranche A-2 Term Notes"), (iii) if
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Tranche B Term Loans, by a promissory note substantially in the form of Exhibit
H-3, with blanks appropriately completed (each, a "Tranche B Term Note" and,
collectively, the "Tranche B Term Notes"), (iv) if Tranche C(CH) Term Loans, by
a promissory note substantially in the form of Exhibit H-4, with blanks
appropriately completed (each, a "Tranche C(CH) Term Note" and, collectively,
the "Tranche C(CH) Term Notes"), (v) if Tranche C(US) Term Loans, by a
promissory note substantially in the form of Exhibit H-5, with blanks
appropriately completed (each, a "Tranche C(US) Term Note" and, collectively,
the "Tranche C(US) Term Notes"), (vi) if Tranche D Term Loans, by a promissory
note in the form of Exhibit H-6, with blanks appropriately completed (each, a
"Tranche D Term Note" and, collectively, the "Tranche D Term Notes"), (vii) if
Revolving Loans, by a promissory note substantially in the form of Exhibit H-7,
with blanks appropriately completed (each, a "Revolving Note" and, collectively,
the "Revolving Notes"), and (viii) if Swing Line Loans, by a promissory note
substantially in the form of Exhibit H-8, with blanks appropriately completed
(the "Swing Line Note"). Each such Lender shall make appropriate notations on
the schedules annexed to the applicable Note of the date, amount and maturity of
each applicable Loan made by it and the amount of each payment of principal made
by the applicable Borrower or Subsidiary Swing Line Borrower, as the case may
be, with respect thereto. Each such Lender is irrevocably authorized by the
applicable Borrower or the applicable Subsidiary Swing Line Borrower, as the
case may be, to make such notations on the applicable Note and each such
Lender's record shall be conclusive absent manifest error; provided, however,
that the failure of a Lender to make, or an error in making, a notation on any
Note with respect to any Loan shall not limit or otherwise affect the
obligations of the respective Borrower hereunder or under such Note to such
Lender.
2.3. Procedure for Committed Borrowings. (a) Each Committed
Borrowing (other than of a Swing Line Loan) shall be made upon the applicable
Borrower's irrevocable written notice (or telephonic notice promptly confirmed
in writing) delivered to the Administrative Agent in the form of a Notice of
Committed Borrowing (which notice must be received by the Administrative Agent
prior to (i) 10:00 a.m. (New York City time), three Business Days prior to the
requested Borrowing Date, in the case of Offshore Currency Loans; (ii) 10:00
a.m. (New York City time), three Business Days prior to the requested Borrowing
Date, in the case of Offshore U.S. Dollar Loans; and (iii) 10:00 a.m. (New York
City time), one Business Day prior to the requested Borrowing Date, in the case
of ABR Loans, and in each case not more than five Business Days prior to the
requested Borrowing Date) specifying:
(A) the amount of the Committed Borrowing, which shall be in an
aggregate amount not less than the Minimum Tranche;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) the Type of Loans comprising the Committed Borrowing;
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(D) in the case of a Borrowing of Offshore Rate Committed Loans, the
duration of the Interest Period therefor; and
(E) in the case of a Borrowing of Offshore Currency Loans, the
Applicable Currency.
(b) The Dollar Equivalent amount of any Borrowing of Revolving
Facility Loans in an Offshore Currency will be determined by the Administrative
Agent for such Borrowing on the Computation Date therefor in accordance with
subsection 2.5(a). Upon receipt of a Notice of Committed Borrowing, the
Administrative Agent will promptly notify each Lender thereof and of the amount
of such Lender's Pro Rata Share of the Committed Borrowing. In the case of a
Borrowing of Revolving Facility Loans comprised of Offshore Currency Loans, such
notice will provide the approximate amount of each Lender's Pro Rata Share of
the Borrowing, and the Administrative Agent will, upon the determination of the
Dollar Equivalent amount of the Borrowing as specified in the Notice of
Committed Borrowing, promptly notify each Lender of the exact amount of such
Lender's Pro Rata Share of the Borrowing.
(c) Each Lender will make the amount of its Pro Rata Share of each
Committed Borrowing available to the Administrative Agent for the account of the
applicable Borrower at the Administrative Agent's Payment Office on the
Borrowing Date requested by such Borrower in Same Day Funds and in the requested
currency (i) in the case of a Committed Borrowing comprised of Loans in U.S.
Dollars, by 11:00 a.m. (New York time) and (ii) in the case of a Borrowing
comprised of Offshore Currency Loans, by such time as the Administrative Agent
may specify. The proceeds of all such Committed Loans will promptly be made
available to the applicable Borrower by the Administrative Agent at such office
by crediting the account of such Borrower on the books of the Administrative
Agent with the aggregate of the amounts made available to the Administrative
Agent by the Lenders and in like funds as received by the Administrative Agent.
(d) After giving effect to any Committed Borrowing, there may not be
more than [ ] different Interest Periods in effect for all Tranche A-1 Term
Loans, [ ] different Interest Periods in effect for all Tranche A-2 Term Loans,
[ ] different Interest Periods in effect for all Tranche B Term Loans, [ ]
different Interest Periods in effect for all Tranche C(CH) Term Loans, [ ]
different Interest Periods in effect for all Tranche C(US) Term Loans, [ ]
different Interest Periods in effect for all Tranche D Term Loans and [ ]
different Interest Periods in effect for all Revolving Loans.
2.4. Conversion and Continuation Elections for Committed Borrowings.
(a) The Borrowers may, upon irrevocable written notice to the Administrative
Agent in accordance with subsection 2.4(b):
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(i) elect, as of any Business Day in the case of ABR Loans, or as
of the last day of the applicable Interest Period, in the case of Offshore
U.S. Dollar Loans, to convert any such Committed Loans (or any part
thereof in an amount not less than the Minimum Tranche) into Committed
Loans in U.S. Dollars of the other Type; or
(ii) elect, as of the last day of the applicable Interest Period,
to continue any Committed Loans having Interest Periods expiring on such
day (or any part thereof in an amount not less than the Minimum Tranche);
provided, however, that if at any time the aggregate amount of Offshore U.S.
Dollar Loans in respect of any Committed Borrowing is reduced, by payment,
prepayment or conversion of part thereof, to be less than the Minimum Tranche,
such Offshore U.S. Dollar Loans shall automatically convert into ABR Loans, and
on and after such date the right of the applicable Borrower to continue such
Committed Loans as, and convert such Committed Loans into, Offshore U.S. Dollar
Loans shall terminate unless and until such Committed Loans are increased, by
additional Borrowings or Conversions, to be at least the Minimum Tranche.
(b) The applicable Borrower shall deliver a Notice of
Conversion/Continuation to be received by the Administrative Agent not later
than (i) 10:00 a.m. (New York City time), three Business Days prior to the
Conversion/Continuation Date, if the Committed Loans are to be continued as
Offshore Currency Loans; (ii) 10:00 a.m. (New York City time), three Business
Days prior to the Conversion/Continuation Date, if the Committed Loans are to be
converted into or continued as Offshore U.S. Dollar Loans; and (iii) 10:00 a.m.
(New York City time), one Business Day prior to the Conversion/Continuation
Date, if the Committed Loans are to be converted into ABR Loans, and in each
case not more than five Business Days prior to the Conversion/Continuation Date,
specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount and Type of Committed Loans to be converted
or continued;
(C) the Type of Committed Loans resulting from the proposed
conversion or continuation; and
(D) other than in the case of conversions into ABR Loans, the
duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore U.S. Dollar Loans, the applicable Borrower has failed to select
timely a new Interest Period to be
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applicable to such Offshore U.S. Dollar Loans, the applicable Borrower shall be
deemed to have elected to convert such Offshore U.S. Dollar Loans into ABR Loans
effective as of the expiration date of such Interest Period. If the applicable
Borrower has failed to select a new Interest Period to be applicable to Offshore
Currency Loans by the applicable time on the third Business Day in advance of
the expiration date of the current Interest Period applicable thereto as
provided in subsection 2.4(b), or if any Event of Default or Unmatured Event of
Default shall then exist, subject to the provisions of subsection 2.5(d), the
applicable Borrower shall be deemed to have elected to continue such Offshore
Currency Loans on the basis of a one month Interest Period.
(d) The Administrative Agent will promptly notify each Lender of its
receipt of a Notice of Conversion/Continuation pursuant to this Section 2.4, or,
if no timely notice is provided by the applicable Borrower, the Administrative
Agent will promptly notify each Lender of the details of any automatic
conversion. All conversions and continuations shall be made ratably according to
the respective outstanding principal amounts of the Committed Loans held by each
Lender with respect to which the notice was given.
(e) Unless the Required Lenders otherwise agree, during the
existence of an Event of Default or Unmatured Event of Default, no Borrower may
elect to have a Committed Loan converted into an Offshore U.S. Dollar Loan or
(other than Tranche A Term Loans) continued as an Offshore Rate Committed Loan.
(f) After giving effect to any conversion or continuation of
Committed Loans, there may not be more than [ ] different Interest Periods in
effect for all Tranche A-1 Term Loans, [ ] different Interest Periods in effect
for all Tranche A-2 Term Loans, [ ] different Interest Periods in effect for all
Tranche B Term Loans, [ ] different Interest Periods in effect for all Tranche
C(CH) Term Loans, [ ] different Interest Periods in effect for all Tranche C(US)
Term Loans, [ ] different Interest Periods in effect for all Tranche D Term
Loans and [ ] different Interest Periods in effect for all Revolving Loans.
2.5. Utilization of Commitments in Offshore Currencies. (a) The
Administrative Agent will determine the Dollar Equivalent amount with respect to
(i) any Borrowing comprised of Offshore Currency Loans as of the requested
Borrowing Date, (ii) any Non-U.S. $ Swing Line Loans, as of the requested date
of borrowing thereof, any Issuance of a Letter of Credit in an Offshore Currency
as of the requested Issuance Date, (iii) any drawing under a Letter of Credit in
an Offshore Currency as of the related Honor Date, (iv) all outstanding Offshore
Currency Loans, Non-U.S. $ Swing Line Loans and L/C Obligations as of the last
Business Day of each month, and (v) any outstanding Offshore Currency Loan and
L/C Obligations as of any redenomination date pursuant to this Section 2.5 or
Section 4.5 and any date on which the Revolving Facility Commitments are reduced
pursuant to Section 2.6.
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(b) In the case of a proposed Borrowing under the Revolving Facility
comprised of Offshore Currency Loans, in the event that any Revolving Facility
Lender gives notice to the Administrative Agent that it is unable to fund
Revolving Facility Loans in an Offshore Currency at a reasonable cost to it, the
Administrative Agent shall, until such notice is withdrawn and to the extent
necessary in order to excuse such Revolving Facility Lender from making any
Revolving Facility Loans in such Offshore Currency and to continue to make
available to the Borrowers the full aggregate amount of the Revolving Facility
Commitments, reallocate from time to time among the Revolving Facility Lenders
the outstanding Revolving Facility Loans denominated in U.S. Dollars and the
Revolving Facility Loans in such Offshore Currency; provided, however, that the
Lenders shall be under no obligation to make Offshore Currency Loans in the
requested Offshore Currency as part of such Borrowing if the Administrative
Agent has received notice from the Required Revolving Facility Lenders by 10:00
a.m. (New York City time), three Business Days prior to the day of such
Borrowing, that such Lenders cannot provide Loans in the requested Offshore
Currency, in which event the Administrative Agent will promptly give notice to
the applicable Borrower that the Borrowing in the requested Offshore Currency is
not then available, and notice thereof also will be given promptly by the
Administrative Agent to the Lenders. If the Administrative Agent shall have so
notified the applicable Borrower that, pursuant to any such notice from the
Required Revolving Facility Lenders, any such Borrowing in a requested Offshore
Currency is not then available, such Borrower may, by notice to the
Administrative Agent not later than 10:00 a.m. (New York City time), on the
requested date of such Borrowing, withdraw the Notice of Committed Borrowing
relating to such requested Borrowing. If such Borrower does so withdraw such
Notice of Committed Borrowing, the Borrowing requested therein shall not occur
and the Administrative Agent will promptly so notify each Lender. If such
Borrower does not so withdraw such Notice of Committed Borrowing, the
Administrative Agent will promptly so notify each Lender and such Notice of
Committed Borrowing shall be deemed to be a Notice of Committed Borrowing that
requests a Borrowing comprised of ABR Loans in an aggregate amount equal to the
Dollar Equivalent of the amount of the originally requested Borrowing in the
Notice of Committed Borrowing; and in such notice by the Administrative Agent to
each Lender the Administrative Agent will state such aggregate amount of such
Borrowing in U.S. Dollars and such Lender's Pro Rata Share thereof.
(c) In the case of a proposed continuation of Offshore Currency
Loans under the Revolving Facility for an additional Interest Period pursuant to
Section 2.4, in the event that any Revolving Facility Lender gives notice to the
Administrative Agent that it is unable to continue Revolving Facility Loans in
an Offshore Currency at a reasonable cost to it, the Administrative Agent shall,
until such notice is withdrawn and to the extent necessary in order to excuse
such Revolving Facility Lender from continuing any Revolving Facility Loans in
such Offshore Currency and to continue to make available to the Borrowers the
ability to continue all outstanding Revolving Loans in any Offshore Currency,
reallocate from time to time among the
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Revolving Facility Lenders the outstanding Revolving Facility Loans denominated
in U.S. Dollars and the Revolving Facility Loans in such Offshore Currency;
provided, however, that the Lenders shall be under no obligation to continue
such Offshore Currency Loans if the Administrative Agent has received notice
from the Required Revolving Facility Lenders by 10:00 a.m. (New York City time),
three Business Days prior to the day of such continuation, that such Lenders
cannot continue to provide Loans in the relevant Offshore Currency, in which
event the Administrative Agent will promptly give notice to the applicable
Borrower that the continuation of such Offshore Currency Loans in the relevant
Offshore Currency is not then available, and notice thereof also will be given
promptly by the Administrative Agent to the Lenders. If the Administrative Agent
shall have so notified such Borrower that, pursuant to such notice from the
Required Revolving Facility Lenders, any such continuation of Offshore Currency
Loans is not then available, any Notice of Continuation/Conversion with respect
thereto shall be deemed withdrawn and such Offshore Currency Loans shall be
repaid on the last day of the Interest Period with respect to such Offshore
Currency Loans.
In the case of a proposed continuation of Offshore Currency Loans
under either Tranche A Term Loan Facility for an additional Interest Period
pursuant to Section 2.4, the Lenders shall be under no obligation to continue
such Offshore Currency Loans if the Administrative Agent has received notice
from the Lenders holding at least a majority of the Tranche A-1 Term Loans or
Tranche A-2 Term Loans, as the case may be, by 10:00 a.m. (New York City time),
three Business Days prior to the day of such continuation, that such Lenders
cannot continue to provide Tranche A Term Loans in the relevant Offshore
Currency, in which event the Administrative Agent will promptly give notice to
CH Borrower that the continuation of such Offshore Currency Loans in the
relevant Offshore Currency is not then available, and notice thereof also will
be given promptly by the Administrative Agent to the Lenders. If the
Administrative Agent shall have given CH Borrower such notice, then, any Notice
of Conversion/Continuation with respect thereto shall be deemed withdrawn and,
unless and until such notice is revoked by the Lenders holding at least a
majority of the Tranche A-1 Term Loans or Tranche A-2 Term Loans, as the case
may be, each Borrowing of Loans under the Tranche A Term Loan Facilities shall
be redenominated and converted into ABR Loans in U.S. Dollars with effect from
the last day of the Interest Period with respect to such Offshore Currency
Loans. If any such notice is revoked, the Administrative Agent shall give CH
Borrower and the Lenders prompt notice thereof and such ABR Loans shall, as of
the fourth Business Day after the date of such revocation, be redenominated and
converted into Offshore Currency Loans in the Applicable Currency of such Loans
prior to being converted into ABR Loans with an Interest Period of one month,
unless CH Borrower shall object thereto in writing prior to such fourth day or
give notice within the applicable time period of its selection of a different
Interest Period in accordance with Section 2.4.
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(d) Notwithstanding anything herein to the contrary, during the
existence of an Event of Default, upon the request of the Required Revolving
Facility Lenders (in the case of clause (i) of this subsection), the Lenders
holding at least a majority of the Tranche A-1 Term Loans (in the case of clause
(ii) of this subsection) or the Lenders holding at least a majority of the
Tranche A-2 Term Loans (in the case of clause (iii) of this subsection), (i) all
or any part of any outstanding Offshore Currency Loans under the Revolving
Facility shall be redenominated and converted into ABR Loans in U.S. Dollars
with effect from the last day of the Interest Period with respect to such
Offshore Currency Loans, (ii) at the end of the current Interest Period
therefor, each Tranche A-1 Term Loan shall be continued for an Interest Period
of one month (or such shorter period as the Lenders holding at least a majority
of the Tranche A-1 Term Loans may request) and (iii) at the end of the current
Interest Period therefor, each Tranche A-2 Term Loan shall be continued for an
Interest Period of one month (or such shorter period as the Lenders holding at
least a majority of the Tranche A-2 Term Loans may request). The Administrative
Agent will promptly notify the applicable Borrower of any request pursuant to
the foregoing sentence.
(e) The Borrowers shall be entitled to request that Revolving
Facility Loans hereunder also be permitted to be made in any other lawful
currency constituting a eurocurrency, in addition to the eurocurrencies
specified in the definition of "Offshore Currency" herein, that in the opinion
of the Required Revolving Facility Lenders is at such time freely traded in the
offshore interbank foreign exchange markets and is freely transferable and
freely convertible into U.S. Dollars (an "Agreed Alternative Currency"). The
applicable Borrower shall deliver to the Administrative Agent any request for
designation of an Agreed Alternative Currency not later than 10:00 a.m. (New
York City time), at least ten Business Days in advance of the date of any
Borrowing hereunder proposed to be made in such Agreed Alternative Currency.
Upon receipt of any such request the Administrative Agent will promptly notify
the Lenders thereof, and each Lender will use its best efforts to respond to
such request within two Business Days of receipt thereof. Each Lender may grant
or accept such request in its sole discretion. The Administrative Agent will
promptly notify the applicable Borrower of the acceptance or rejection of any
such request.
2.6. Reduction or Termination of Commitments. (a) The Borrowers may,
upon not less than five Business Days' prior notice to the Administrative Agent,
terminate the Commitments in any Facility, or permanently reduce the Commitments
in any Facility by an aggregate amount equal to the Dollar Equivalent of U.S.
$1,000,000 or a higher integral multiple of U.S. $1,000,000; unless, in the case
of the Revolving Facility, after giving effect thereto and to any prepayments of
the Revolving Facility Loans made on the effective date of such reduction, the
then outstanding principal Dollar Equivalent amount of all Revolving Facility
Loans, plus (without duplication) the Effective Amount of all L/C Obligations
together would
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exceed the amount of the combined Revolving Facility Commitments of all
Revolving Facility Lenders then in effect.
(b) The Commitments relating to each Term Loan Facility shall
automatically and permanently expire concurrently with the making of the Term
Loans thereunder on the Closing Date.
(c) Once reduced in accordance with this Section, the Commitments
may not be increased. Any reduction of the Commitments in any Facility shall be
applied to each Lender's Commitment in such Facility according to its Pro Rata
Share. All accrued commitment fees in respect of any Facility to, but not
including, the effective date of any reduction or termination of Commitments in
such Facility shall be paid on the effective date of such reduction or
termination.
2.7. Prepayments. (a) So long as any Term Loans are outstanding,
within 30 days following each date on which US Borrower or any Subsidiary
receives any Net Cash Proceeds from any Taking or Destruction or loss of title
to any Mortgaged Real Property, a Dollar Equivalent amount equal to 100% of such
Net Cash Proceeds shall be applied as a mandatory prepayment of principal of the
Term Loans; provided, however, that so long as no Event of Default or Unmatured
Event of Default then exists and such proceeds do not exceed the Dollar
Equivalent amount of U.S. $10 million, such proceeds shall not be required to be
so applied on such date to the extent that the Borrowers have delivered an
Officers' Certificate to the Administrative Agent on or prior to such date
stating that such proceeds shall be used to replace or restore any properties or
assets in respect of which such proceeds were paid within 360 days following the
date of the receipt of such proceeds (which certificate shall set forth the
estimates of the proceeds to be so expended); provided, further, however, that
(i) if the amount of such proceeds exceeds the Dollar Equivalent amount of U.S.
$10 million, then the entire amount and not just the portion in excess of the
Dollar Equivalent amount of U.S. $10 million shall be applied as a mandatory
prepayment of Term Loans as provided above in this subsection 2.7(a) and (ii) if
all or any portion of such proceeds not required to be applied to the prepayment
of Term Loans pursuant to the preceding proviso are not so used within 360 days
after the date of the receipt of such proceeds, such remaining portion shall be
applied on the last day of such period (or the next preceding Business Day if
such last day is not a Business Day) as a mandatory prepayment of principal of
the Term Loans as provided above in this subsection 2.7(a). Each such prepayment
shall be applied as set forth in subsection 2.7(f).
(b) So long as any Term Loans are outstanding, within 90 days after
the end of each fiscal year of US Borrower ending after December 31, 1996, the
Borrowers shall prepay the Term Loans in a Dollar Equivalent amount equal to 75%
of Excess Cash Flow for such fiscal year; provided, however, that if the Debt to
EBITDA Ratio as of the end of the fiscal year
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immediately preceding the date of any such prepayment is less than 3.50 to 1.0,
such percentage shall be 50%. Each such prepayment shall be applied as set forth
in subsection 2.7(f).
(c) So long as any Term Loans are outstanding, within 30 days after
the receipt by US Borrower or any Subsidiary of Net Cash Proceeds from any Asset
Sale, the Borrowers shall prepay the Term Loans in a Dollar Equivalent amount
equal to 100% of the Net Cash Proceeds of such Asset Sale; provided, however,
that the Net Cash Proceeds from any Asset Sale permitted by each of subsection
8.2(d) and subsection 8.2(i) shall in each case not be required to be so applied
to the prepayment of the Term Loans on such date if (i) no Event of Default or
Unmatured Event of Default then exists and (ii) the Borrowers deliver an
Officers' Certificate to the Administrative Agent on or prior to such date
stating that such Net Cash Proceeds shall be used in the business of the
Borrowers within 180 days following the date of such Asset Sale (which
certificate shall set forth the estimates of the proceeds to be so expended);
provided, further, however, that if all or any portion of such Net Cash Proceeds
not so applied to the prepayment of Term Loans is not so used within such 180
day period, such remaining portion shall be applied on the last day of such
period (or the next preceding Business Day if such last day is not a Business
Day) as a mandatory prepayment of principal of outstanding Term Loans as
provided above in this subsection 2.7(c). Each such prepayment shall be applied
as set forth in subsection 2.7(f).
(d) So long as any Term Loans are outstanding, the Borrowers shall
prepay the Term Loans concurrently with the receipt of any Net Cash Proceeds
from the issuance of any Indebtedness by US Borrower or any Subsidiary (other
than any Indebtedness permitted by Section 8.5) in a Dollar Equivalent amount
equal to 100% of such Net Cash Proceeds. Each such prepayment shall be applied
as set forth in subsection 2.7(f).
(e) So long as any Term Loans are outstanding, the Borrowers shall
prepay the Term Loans concurrently with the receipt of any Net Cash Proceeds
from any capital contribution to US Borrower or any Subsidiary or from the
issuance or sale of any equity securities of MT Investors, Holding or any of its
Subsidiaries or any other direct or indirect parent of US Borrower (other than
(x) the Equity Issuance, (y) the exercise of employee stock options and the
repayment of loans to employees and (z) in each case, contributions from or
issuances to another Company) in a Dollar Equivalent amount equal to 50% of such
Net Cash Proceeds; provided, however, that no such prepayment shall be required
in connection with the issuance or sale by Holding of any equity securities of
Holding to the Investors or from the proceeds of any capital contribution
therefrom to US Borrower or any Subsidiary in an aggregate amount of Net Cash
Proceeds up to the Dollar Equivalent amount of U.S. $35 million since the
Closing Date (over and above the Equity Issuance) if (i) no Event of Default or
Unmatured Event of Default then exists and (ii) such Net Cash Proceeds are
contemporaneously utilized by US Borrower and the Subsidiaries in their
business; provided, further, however, that such Net
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Cash Proceeds are not utilized by US Borrower or any Subsidiary, directly or
indirectly, to redeem, retire or acquire any other Indebtedness of US Borrower
or any Subsidiary. Each such prepayment shall be applied as set forth in
subsection 2.7(f).
(f) Each prepayment of the Term Loans required by subsections
(a)-(e) of this Section 2.7 shall be applied pro rata among the Term Loan
Facilities and, as to each Term Loan Facility, first to the next immediately
succeeding installments of each of the Term Loan Facilities as set forth in the
relevant subsection of Section 2.9 and, second, pro rata to the remaining
installments of the Term Loans under each of the Term Loan Facilities as set
forth in the relevant subsection of Section 2.9. Subject to subsection 2.10(b),
all prepayments of Term Loans shall be made together with all accrued interest
thereon and any amounts required by Section 4.4, and all such payments shall be
applied to the payment of interest and such Section 4.4 amounts before
application to principal. [All amounts required to be applied shall be rounded
to the nearest U.S. $[ ] in the case of Tranche B Term Loans, Tranche C Term
Loans and Tranche D Term Loans, the nearest [currency and amount] in the case of
Tranche A-1 Term Loans and [currency and amount] in the case of Tranche A-2 Term
Loans.] Notwithstanding the foregoing, in respect of any partial prepayment of
Term Loans pursuant to any of subsection (a)-(e) of this Section 2.7 any Lender
having a Tranche B Term Loan, a Tranche C Term Loan or a Tranche D Term Loan may
irrevocably decline receipt of its share of any such prepayment, and, if such
Lender so declines, such share shall be applied as an additional prepayment of
the Tranche A Term Loans, each such additional prepayment to be applied pro rata
among the Tranche A-1 Term Loans and the Tranche A-2 Term Loans and, as to any
such Term Loan Facility, pro rata to the remaining installments of the Term
Loans under each such Facility as set forth in subsection 2.9, subject, however,
to clause (iii) of subsection 2.7(h). If the amount to be so applied to Tranche
A Term Loans exceeds the amount of the Tranche A Term Loans then outstanding, no
prepayment shall be required with respect to the amount of such excess. The
Administrative Agent will promptly notify the Lenders of any prepayment required
to be made. Any such Lender that wishes to decline receipt of its share of any
such prepayment shall promptly, and in any event no later than the date
specified for such prepayment, notify the Administrative Agent.
(g) Subject to Section 4.4, either Borrower may, at any time or from
time to time, ratably prepay, without premium or penalty, Committed Loans under
the Revolving Loan Facility or under the Term Loan Facilities in whole or in
part, in an aggregate Dollar Equivalent principal amount of at least U.S. $1
million and a higher integral multiple of 1 million units of the Applicable
Currency. The applicable Borrower shall deliver a notice of prepayment in
accordance with Section 11.2 to be received by the Administrative Agent not
later than (i) 10:00 a.m. (New York City time), three Business Days in advance
of the prepayment date, if the Committed Loans to be prepaid are Offshore Rate
Committed Loans, and (ii) 10:00 a.m. (New York City time), one Business Day
prior to the prepayment date, if the Committed Loans to be
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prepaid are ABR Loans (and in each case on not more than five Business Days'
prior notice). Such notice of prepayment shall specify the date and amount of
such prepayment and whether such prepayment is of ABR Loans, Offshore Rate
Committed Loans, or any combination thereof, whether Revolving Loans or Term
Loans are being prepaid and the Applicable Currency. Such notice shall not
thereafter be revocable by the Borrowers. The Administrative Agent will promptly
notify each Lender thereof and of such Lender's Pro Rata Share of such
prepayment. If such notice is given by a Borrower, such Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to each
such date on the amount prepaid and any amounts required pursuant to Section
4.4. Each such prepayment shall be applied pro rata among the Term Loan
Facilities and, as to each Term Loan Facility first, to the next scheduled
quarterly installments of each of the Term Loan Facilities as set forth in the
relevant subsection of Section 2.9 and second, pro rata to the remaining
installments of the Term Loans under each of the Term Loan Facilities as set
forth in the relevant subsection of Section 2.9, subject, however, to clause
(iii) of subsection 2.7(h). Notwithstanding the foregoing, in respect of any
partial prepayment of Term Loans pursuant to this subsection 2.7(g), any Lender
having a Tranche B Term Loan, a Tranche C Term Loan or a Tranche D Term Loan may
decline receipt of its share of any such prepayment, and, if such Lender so
declines, such share shall be applied as an additional prepayment of the Tranche
A Term Loans, each such additional prepayment to be applied pro rata among the
Tranche A-1 Term Loans and the Tranche A-2 Term Loans and, as to any such Term
Loan Facility, pro rata to the remaining installments of the Term Loans under
each such Facility as set forth in subsection 2.9; provided, however, that any
excess of such prepayment over the amount of outstanding Tranche A Term Loans
may, at the option of the Borrowers, nonetheless be applied to the prepayment of
the Tranche B Term Loans, Tranche C Term Loans and Tranche D Term Loans. The
Administrative Agent will promptly notify the Lenders of any prepayment so to be
made. Any such Lender that wishes to decline receipt of its share of any such
prepayment shall promptly, and in any event no later than the date specified for
such prepayment, notify the Administrative Agent.
(h) With respect to each prepayment of Loans pursuant to Section
2.7, the Borrowers may designate the Types of Loans which are to be repaid and
the specific Borrowing(s) under the affected Facility pursuant to which made;
provided, however, that (i) Offshore Rate Loans made pursuant to a specific
Facility may be designated for prepayment only on the last day of an Interest
Period applicable thereto unless all Offshore Rate Loans made pursuant to such
Facility with Interest Periods ending on such date of prepayment and all ABR
Loans made pursuant to such Facility have been paid in full; (ii) if any
prepayment of Offshore Rate Loans made pursuant to a single Borrowing shall
reduce the outstanding Loans made pursuant to such Borrowing to an amount less
than the Minimum Tranche, such Borrowing shall be immediately converted into, if
such Borrowing is Offshore U.S. Dollar Loans, ABR Loans and, if Offshore
Currency Loans, Offshore Currency Loans having an Interest Period of one
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month; and (iii) each repayment of any Loans made pursuant to a Borrowing shall
be applied pro rata among such Loans, unless a Borrower shall have become
obligated to make any payment pursuant to Section 4.1, in which case such
Borrower may prepay the Loans held solely by the Lender or Lenders to which it
is obligated to make such payment. In the absence of a designation by the
Borrowers as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion with a
view, but no obligation, to minimize funding losses owing under Section 4.4.
(i) Notwithstanding subsections 2.7(a) and (c), to the extent that
the Net Cash Proceeds required to be applied to a prepayment of the Loans
pursuant to such subsections (1) are prohibited or delayed by applicable law
from being repatriated to the jurisdiction of the Borrower required to make any
such prepayment or (2) may not be so repatriated without causing an adverse tax
consequence, such Net Cash Proceeds required to be applicable to a prepayment of
the Loans pursuant to such subsections shall, so long as no Event of Default or
Unmatured Event of Default has occurred and is continuing, not be required to be
applied as a prepayment of the Loans at the time provided in such subsections to
the extent that the aggregate Dollar Equivalent amount of Net Cash Proceeds
proposed to be not so applied for such event when added to the aggregate Dollar
Equivalent amount of Net Cash Proceeds from all prior or concurrent events which
has not been applied by virtue of this subsection 2.7(i) is less than [ ]% of
Net Tangible Assets at such time. If and when such repatriation is permitted
under the applicable local law or may be made without an adverse tax
consequence, as the case may be, such repatriation shall be immediately effected
and such Net Cash Proceeds shall be applied in the manner set forth in
subsections 2.7(a) and (c), with any time limit therein being deemed to have
started upon receipt of such Net Cash Proceeds by any Subsidiary of US Borrower
notwithstanding this subsection 2.7(i); provided, however, if the time limit
shall have expired, then such Net Cash Proceeds so repatriated shall be applied
to the prepayment of the Term Loans as set forth in subsection 2.7(f) within
three Business Days.
2.8. Currency Exchange Fluctuations. (a) The Borrowers will
implement and maintain internal controls to monitor the borrowings and
repayments of Loans by the Borrowers and the issuance of and drawings under
Letters of Credit, with the object of preventing any request for a Credit
Extension that would result in the Aggregate Outstanding Revolving Credit with
respect to all of the Revolving Facility Lenders (including the Swing Line
Lenders) being in excess of the aggregate Revolving Facility Commitments then in
effect and of promptly identifying and remedying any circumstance where, by
reason of changes in exchange rates, the Aggregate Outstanding Revolving Credit
with respect to all of the Revolving Facility Lenders (including the Swing Line
Lenders) exceeds the aggregate Revolving Facility Commitments then in effect.
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(b) Subject to Section 4.4, if on any Computation Date the
Administrative Agent shall have determined that the Aggregate Outstanding
Revolving Credit of all of the Revolving Facility Lenders exceeds the combined
Revolving Facility Commitments of all Revolving Facility Lenders by more than
the Dollar Equivalent amount of U.S. $5 million due to a change in applicable
rates of exchange between U.S. Dollars, on the one hand, and Offshore
Currencies, on the other hand, then the Administrative Agent shall give notice
to the Borrowers that a prepayment of Loans (or, if no Revolving Credit Loans
are outstanding, payment of unreimbursed drawings under Letters of Credit, or if
none thereof, Cash Collateralization of outstanding Letters of Credit) is
required under this subsection, and the Borrowers agree if such excess shall not
have been prepaid within 90 days of such notice or during such 90 days such
excess has not been eliminated by changes in currency exchange rates thereupon
to make prepayments (by such repayment of Loans, payment of unreimbursed
drawings or Cash Collateralization) of their respective pro rata portion of such
excess (determined by reference to the aggregate Dollar Equivalent amount of
each Borrower's outstanding Revolving Facility Loans, plus (without duplication)
the Effective Amount of all L/C Obligations relative to the total of such
amounts for both Borrowers) such that, after giving effect to such prepayment
(or payment or Cash Collateralization and changes in currency exchange rates),
the Aggregate Outstanding Revolving Credit of all of the Revolving Lenders does
not exceed the combined Revolving Facility Commitments of all Revolving Facility
Lenders.
2.9. Repayment. (a) US Borrower shall repay the Tranche B Term
Loans, the Tranche C(US) Term Loans and the Tranche D Term Loans in the
installments as set forth on Schedule 2.9(a).
(b) CH Borrower shall repay the Tranche A-1 Term Loans, the Tranche
A-2 Term Loans and the Tranche C(CH) Term Loans in the installments as set forth
on Schedule 2.9(b).
Each scheduled installment of principal on the Term Loans as set
forth on Schedules 2.9(a) and (b) shall be automatically adjusted upon
application of any prepayment pursuant to Section 2.7.
2.10. Interest. (a) Each Committed Loan (other than any Non-U.S. $
Swing Line Loan) shall, except as otherwise provided herein, bear interest on
the outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to (i) the Offshore Rate or the Alternate Base Rate, as the
case may be (and subject to the Borrowers' right to convert to the other Type of
Committed Loans under Section 2.4), plus the Applicable Margin. Each Non-U.S. $
Swing Line Loan shall bear interest at the rate per annum equal to the Overnight
Rate from time to time in effect for the applicable Offshore Currency of such
Loan, plus the Applicable Margin.
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(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of Loans
pursuant to Section 2.7 for the portion of the Loans so prepaid; provided,
however, that in the event that any Term Loans that are ABR Loans are prepaid
pursuant to Section 2.7, interest accrued on such Loans shall be payable on the
next succeeding Interest Payment Date thereafter (or at final maturity, if
earlier).
(c) Notwithstanding subsections (a) and (b) of this Section, if any
amount of principal of or interest on any Loan, or any other amount payable
hereunder or under any other Loan Document, is not paid in full when due
(whether at stated maturity, by acceleration, demand or otherwise), the
Borrowers and/or the Subsidiary Swing Line Borrowers, as the case may be, agree,
to the extent permitted by applicable law, to pay interest on such unpaid
principal or other amount from the date such amount becomes due until the date
such amount is paid in full, after as well as before any entry of judgment
thereon, payable on demand, at a rate per annum equal to (i) in the case of
principal due in respect of any Loan prior to the end of an Interest Period
applicable thereto, the rate otherwise applicable to such Loan, plus 2%, and
(ii) in the case of any other amount, (x) if such amount is payable in U.S.
Dollars, the Alternate Base Rate from time to time in effect, plus 2% and (y) if
such amount is payable in a currency other than U.S. Dollars, the Overnight Rate
from time to time in effect, plus the Applicable Margin for Offshore Rate
Committed Loans which are Revolving Loans from time to time in effect, plus 2%.
(d) Anything herein to the contrary notwithstanding, the obligations
of the Borrowers and the Subsidiary Swing Line Borrowers to any Lender hereunder
shall be subject to the limitation that payments of interest shall not be
required for any period for which interest is computed hereunder, to the extent
(but only to the extent) that contracting for or receiving such payment by such
Lender would be contrary to the provisions of any law applicable to such Lender
limiting the highest rate of interest that may be lawfully contracted for,
charged or received by such Lender, and in such event the applicable Borrower or
the applicable Subsidiary Swing Line Borrower shall pay such Lender interest at
the highest rate permitted by applicable law.
2.11. Fees. In addition to certain fees described in Section 3.8:
(a) Arrangement, Agency Fees. The Borrowers shall pay fees to the
Arranger for the Arranger's own account as required by the letter
agreement ("Arranger Fee Letter") between the Arranger and AEA dated April
10, 1996 and shall pay agency fees to the Administrative Agent for the
Administrative Agent's own account as required by the letter agreement
between the Administrative Agent and AEA dated [ ], 1996
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(the "Administrative Agent's Fee Letter" and, together with the Arranger
Fee Letter, the "Fee Letters").
(b) Facility Fees. The Borrowers shall pay to the Administrative
Agent for the account of each Revolving Facility Lender a facility fee
computed at a rate per annum equal to .50% (the "Facility Fee") on the
then effective amount of such Lender's Revolving Facility Commitment,
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter. Such Facility Fee shall accrue from the Closing Date to
the later of the Termination Date and the date on which the Revolving
Facility Commitments have been terminated in full and shall be due and
payable quarterly in arrears on the last Business Day of each calendar
quarter (commencing December 31, 1996) through the Termination Date or
such earlier date as the Revolving Facility Commitments have been
terminated in full.
2.12. Computation of Fees and Interest. (a) All computations of the
Commitment Fee shall be made on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed. All other computations of interest and
fees shall be made on the basis of a 360-day year and actual days elapsed.
Interest and fees shall accrue during each period during which interest or such
fees are computed from the first day thereof to the last day thereof.
(b) Each determination of an interest rate or a Dollar Equivalent
amount by the Administrative Agent shall be conclusive and binding on the
Borrowers and the Lenders in the absence of manifest error. The Administrative
Agent will, at the request of the Borrowers or any Lender, deliver to the
Borrowers or such Lender, as the case may be, a statement showing the
calculations used by the Administrative Agent in determining any interest rate
or Dollar Equivalent amount.
2.13. Payments by the Borrowers. (a) All payments to be made by the
Borrowers and/or the Subsidiary Swing Line Borrowers shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Borrowers and/or the Subsidiary Swing Line Borrowers
shall be made to the Administrative Agent for the account of the Lenders at the
Administrative Agent's Payment Office and (i) with respect to principal of,
interest on, and any other amount relating to any Offshore Currency Loan, shall
be made in the Offshore Currency in which such Loan is denominated or payable,
and (ii) with respect to all other amounts payable hereunder, shall be made in
U.S. Dollars. Such payments shall be made in Same Day Funds and (x) in the case
of Offshore Currency payments, no later than such time on the dates specified
herein as may be determined by the Administrative Agent (and advised in writing
to the Borrowers) to be necessary for such payment to be credited on such date
in accordance with normal banking procedures in the place of
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payment, and (y) in the case of any U.S. Dollar payments, no later than 11:00
a.m. (New York City time) on the date specified herein. The Administrative Agent
will promptly distribute to each Lender its Pro Rata Share of such payment in
like funds as received. Any payment received by the Administrative Agent later
than the time specified in clause (x) or (y) above, as applicable, shall be
deemed to have been received on the following Business Day, and any applicable
interest or fee shall continue to accrue.
(b) Whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall be included in the computation of interest or fees, as the case may
be.
(c) Unless the Administrative Agent receives notice from the
Borrowers and/or the applicable Subsidiary Swing Line Borrower, as the case may
be, prior to the date on which any payment is due to the Lenders that the
Borrowers and/or the applicable Subsidiary Swing Line Borrower, as the case may
be, will not make such payment in full as and when required, the Administrative
Agent may assume that the Borrowers and/or the applicable Subsidiary Swing Line
Borrower, as the case may be, has made such payment in full to the
Administrative Agent on such date in Same Day Funds and the Administrative Agent
may (but shall not be required to), in reliance upon such assumption, distribute
to each Lender on such due date an amount equal to the amount then due such
Lender. If and to the extent the Borrowers and/or the applicable Subsidiary
Swing Line Borrower, as the case be, has not made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent on
demand such amount distributed to such Lender, together with interest thereon at
(i) in the case of a payment in an Offshore Currency, the Overnight Rate or (ii)
in the case of a payment in U.S. Dollars, the U.S. Federal Funds Rate, in each
case for each day from the date such amount is distributed to such Lender until
the date repaid.
2.14. Payments by the Lenders to the Administrative Agent. (a)
Unless the Administrative Agent receives notice from a Lender on or prior to the
Closing Date or, with respect to any Committed Borrowing after the Closing Date,
at least one Business Day prior to the date of such Borrowing, that such Lender
will not make available as and when required hereunder to the Administrative
Agent for the account of the applicable Borrower the amount of that Lender's Pro
Rata Share of the Committed Borrowing the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent in Same
Day Funds on the Borrowing Date and the Administrative Agent may (but shall not
be required to), in reliance upon such assumption, make available to the
Borrowers on such date a corresponding amount. If and to the extent any Lender
shall not have made its full amount available to the Administrative Agent in
Same Day Funds and the Administrative Agent in such circumstances has made
available to the Borrowers such amount, such Lender shall on the Business Day
following such Borrowing Date make such amount available to the Administrative
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Agent, together with interest at (i) in the case of a payment in an Offshore
Currency, the Overnight Rate and (ii) in the case of a payment in U.S. Dollars,
at the U.S. Federal Funds Rate, in each case for each day during such period. A
notice of the Administrative Agent submitted to any Lender with respect to
amounts owing under this subsection (a) shall be conclusive, absent manifest
error. If such amount is so made available, such payment to the Administrative
Agent shall constitute such Lender's Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to the
Administrative Agent on the Business Day following the Borrowing Date, the
Administrative Agent will notify the Borrowers of such failure to fund and, upon
demand by the Administrative Agent, the Borrowers shall pay such amount to the
Administrative Agent for the Administrative Agent's account, together with
interest thereon for each day elapsed since the date of such Committed
Borrowing, at a rate per annum equal to the interest rate applicable at the time
to the Committed Loans comprising such Borrowing.
(b) The failure of any Lender to make any Loan on any Borrowing Date
shall not relieve any other Lender of its obligation hereunder (if any) to make
a Loan on such Borrowing Date, but no Lender shall be responsible for the
failure of any other Lender to make the Loan to be made by such other Lender on
any Borrowing Date.
2.15. Adjustments. If any Lender (a "benefitted Lender") shall at
any time receive any payment of all or part of its Revolving Credit Loans, Term
Loans or the L/C Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 9.1(f) or
(g), or otherwise (except pursuant to subsection 2.6, 2.7, 2.8 or 2.9, Article
IV or Section 11.8)), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Revolving Credit Loans, Term Loans or the L/C Obligations, as the case
may be, owing to it, or interest thereon, such benefitted Lender shall purchase
for cash from the other Lenders an interest (by participation, assignment (in
accordance with Section 11.8) or otherwise) in such portion of each such other
Lender's Revolving Credit Loans, Term Loans or the L/C Obligations, as the case
may be, owing to it, or shall provide such other Lenders with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however, that
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. Each Borrower expressly consents to the foregoing arrangement and
agrees that any holder of a participation in any such Loan or L/C Obligation, as
the case may be, so purchased and any other subsequent holder of a participation
in any Loan or L/C Obligation otherwise acquired may exercise any and all rights
of banker's lien, set off or counterclaim with respect to any and all monies
owing by such
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Borrower to that holder as fully as if that holder were a holder of such a Loan
or L/C Obligation in the amount of the participation held by that holder.
2.16. Swing Line Commitment. Subject to the terms and conditions of
this Agreement, each Swing Line Lender agrees to make loans to the Swing Line
Borrowers on a revolving basis (each such loan, a "Swing Line Loan") from time
to time on any Business Day during the period from the Closing Date to the
Termination Date in an aggregate principal amount at any one time outstanding
for the Swing Line Borrowers collectively not to exceed the Dollar Equivalent
amount of U.S. $25 million; provided, however, that (i) the aggregate amount of
Swing Line Loans made and outstanding at any one time to any Subsidiary Swing
Line Borrower shall not exceed the Dollar Equivalent amount of the Subsidiary
Swing Line Borrower Sublimit for such Subsidiary Swing Line Borrower and (ii)
the sum of the aggregate principal amount of all outstanding Swing Line Loans,
plus the aggregate principal Dollar Equivalent amount of all other outstanding
Revolving Facility Loans, plus (without duplication) the Effective Amount of all
L/C Obligations shall not at any time exceed the Revolving Facility Commitments
of all Revolving Facility Lenders. All Swing Line Loans made in U.S. Dollars
shall be made and maintained as ABR Loans.
2.17. Borrowing Procedures for Swing Line Loans. (a) A Borrower
requesting a Swing Line Loan shall give written or telephonic notice to the
Administrative Agent and the Applicable Swing Line Lender of each proposed
Borrowing pursuant to this Section 2.17 not later than 1:00 p.m. (local time) on
the proposed date of Borrowing (promptly followed within one Business Day by
delivery of a written notice). Each such notice shall be effective upon receipt
by the Administrative Agent and the Applicable Swing Line Lender and shall
specify the date and amount of Borrowing. Unless the Applicable Swing Line
Lender has received written notice prior to 1:00 p.m. (local time) on the
proposed Borrowing Date from the Administrative Agent or any Lender that one or
more of the conditions precedent set forth in Article V with respect to such
Borrowing is not then satisfied, the Applicable Swing Line Lender shall pay over
the requested amount to the applicable Swing Line Borrower on the requested
Borrowing Date. Each Swing Line Loan shall be made on a Business Day and shall
be in the amount of at least U.S. $500,000 and an integral multiple of U.S.
$500,000 if made in U.S. Dollars and at least [ ] units of the Applicable
Currency and an integral multiple of [ ] units of the Applicable Currency, if
made in any Offshore Currency. The Applicable Swing Line Lender will promptly
notify the Administrative Agent of the making and amount of each Swing Line Loan
made by such Swing Line Lender.
(b) The Administrative Agent and the Applicable Swing Line Lender
will determine the Dollar Equivalent amount with respect to (i) any Borrowing of
Swing Line Loans in an Offshore Currency as of the requested Borrowing Date,
(ii) all outstanding Swing Line Loans made by such Swing Line Lender that are
made in an Offshore Currency as of the last
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Business Day of each month, and (iii) any outstanding Swing Line Loans made by
such Swing Line Lender that are made in an Offshore Currency as of any
redenomination date pursuant to this Section 2.17 and any date on which the
Revolving Facility Commitment are reduced pursuant to Section 2.6.
(c) In the case of a proposed Borrowing of a Swing Line Loan in an
Offshore Currency, in the event that Applicable Swing Line Lender gives notice
to the Administrative Agent that it is unable to fund Swing Line Loans in such
Offshore Currency, such Swing Line Lender shall be under no obligation to make
Swing Line Loans in such Offshore Currency as part of such Borrowing if the
Administrative Agent has received notice from such Swing Line Lender by 2:00
p.m. (local time), on the proposed day of such Borrowing, that such Swing Line
Lender cannot provide Swing Line Loans in the requested Offshore Currency, in
which event the Administrative Agent will promptly give notice to the applicable
Swing Line Borrower that the Borrowing in the requested Offshore Currency is not
then available. If the Administrative Agent shall have so notified the
applicable Swing Line Borrower that any such Borrowing in a requested Offshore
Currency is not then available, such Swing Line Borrower may, by notice to the
Administrative Agent not later than 3:00 p.m. (local time), on the requested
date of such Borrowing, withdraw the notice of borrowing relating to such
requested Borrowing. If such Swing Line Borrower does so withdraw such notice of
borrowing, the Borrowing requested therein shall not occur. If such Swing Line
Borrower does not so withdraw such notice of borrowing, the Administrative Agent
will promptly notify the Applicable Swing Line Lender and such notice of
borrowing shall be deemed to be a notice of borrowing that requests a borrowing
comprised of ABR Loans in an aggregate amount equal to the Dollar Equivalent of
the amount of the originally requested Borrowing in the notice of borrowing.
2.18. Refunding of Swing Line Loans. The Applicable Swing Line
Lender may, at any time in its sole and absolute discretion, on behalf of the
U.S. Borrower, with respect to any Swing Line Loan made to US Borrower, or CH
Borrower, with respect to any Swing Line Borrower other than US Borrower (and
each such Borrower hereby irrevocably directs the Applicable Swing Line Lender
to act on its behalf), request each Revolving Facility Lender to make a
Revolving Loan in U.S. Dollars in an amount equal to such Revolving Facility
Lender's Pro Rata Share of the Dollar Equivalent amount of the principal amount
of the Swing Line Loans made by such Swing Line Lender outstanding on the date
such notice is given. Unless any of the events described in subsection 9.1(f) or
(g) shall have occurred (in which event the procedures of Section 2.19 shall
apply), and regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Loan are then satisfied or the aggregate
amount of such Revolving Loans is not in the minimum or integral amount
otherwise required hereunder, each Revolving Facility Lender shall make the
proceeds of its Revolving Loan available to the Administrative Agent for the
account of the Applicable Swing Line Lender at the office of the Administrative
Agent in New York prior to 11:00 a.m. (New York City time)
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in Same Day Funds on the Business Day next succeeding the date such notice is
given. The proceeds of such Revolving Loans shall be immediately applied to
repay the outstanding Swing Line Loans of the Applicable Swing Line Lender. All
Revolving Loans made pursuant to this Section 2.18 shall be ABR Loans (but,
subject to the other provisions of this Agreement, may be converted to Offshore
Rate Committed Loans).
2.19. Participations in Swing Line Loans. (a) If an event described
in subsection 9.1(f) or (g) occurs (or for any reason the Revolving Facility
Lenders may not make Revolving Loans pursuant to Section 2.18), each Revolving
Facility Lender will, upon notice from the Administrative Agent, purchase from
the Applicable Swing Line Lender (and the Applicable Swing Line Lender will sell
to each such Revolving Facility Lender) an undivided participation interest in
all outstanding Swing Line Loans of such Swing Line Lender in an amount equal to
its Pro Rata Share of the Dollar Equivalent amount of the outstanding principal
amount of the Swing Line Loans of such Swing Line Lender (and each Revolving
Facility Lender will immediately transfer to the Administrative Agent, for the
account of the Applicable Swing Line Lender, in immediately available funds, the
amount of its participation).
(b) Whenever, at any time after a Swing Line Lender has received
payment for any Revolving Facility Lender's participation interest in the Swing
Line Loans of such Swing Line Lender pursuant to subsection 2.19(a), such Swing
Line Lender receives any payment on account thereof, such Swing Line Lender will
distribute to the Administrative Agent for the account of such Revolving
Facility Lender its participation interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Revolving Facility Lender's participation interest was outstanding
and funded) in like funds as received; provided, however, that in the event that
such payment received by such Swing Line Lender is required to be returned, such
Revolving Facility Lender will return to the Administrative Agent for the
account of such Swing Line Lender any portion thereof previously distributed by
such Swing Line Lender to it in like funds as such payment is required to be
returned by such Swing Line Lender.
2.20. Swing Line Participation Obligations Unconditional. (a) Each
Revolving Facility Lender's obligation to make Revolving Loans pursuant to
Section 2.18 and/or to purchase participation interests in Swing Line Loans
pursuant to Section 2.19 shall be absolute and unconditional and shall not be
affected by any circumstance whatsoever, including (a) any set-off,
counterclaim, recoupment, defense or other right which such Revolving Facility
Lender may have against the Applicable Swing Line Lender, any Loan Party or any
other Person for any reason whatsoever; (b) the occurrence or continuance of an
Event of Default; (c) any adverse change in the condition (financial or
otherwise) of any Loan Party or any other Person; (d) any breach of this
Agreement by any Loan Party or any other Revolving Facility Lender; (e) any
inability of the applicable Swing Line Borrower to satisfy the conditions
precedent to
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borrowing set forth in this Agreement on the date upon which any Swing Line Loan
is to be refunded or any participation interest therein is to be purchased; or
(f) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
(b) Notwithstanding the provisions of subsection 2.20(a), no
Revolving Facility Lender shall be required to make any Revolving Loan to either
Borrower to refund a Swing Line Loan pursuant to Section 2.18 or to purchase a
participation interest in a Swing Line Loan pursuant to Section 2.19 if, prior
to the making by the Applicable Swing Line Lender of such Swing Line Loan, such
Swing Line Lender received written notice from such Revolving Facility Lender
specifying that such Revolving Facility Lender believes in good faith that one
or more of the conditions precedent to the making of such Swing Line Loan were
not satisfied and, in fact, such conditions precedent were not satisfied at the
time of the making of such Swing Line Loan; provided, however, that the
obligation of such Revolving Facility Lender to make such Revolving Loans and to
purchase such participation interests shall be reinstated upon the earlier to
occur of (i) the date on which such Revolving Facility Lender notifies the
Applicable Swing Line Lender that its prior notice has been withdrawn and (ii)
the date on which all conditions precedent to the making of such Swing Line Loan
have been satisfied (or waived by the Required Revolving Facility Lenders, the
Required Lenders or all Lenders, as applicable).
2.21. Conditions to Swing Line Loans. Notwithstanding any other
provision of this Agreement, no Swing Line Lender shall be obligated to make any
Swing Line Loan if an Event of Default or Unmatured Event of Default exists or
would result therefrom.
ARTICLE III.
THE LETTERS OF CREDIT
3.1. The Letter of Credit Subfacility. (a) On the terms and
conditions set forth herein, (i) the L/C Lender agrees, (A) from time to time on
any Business Day during the period from the Closing Date to the Termination Date
to issue Letters of Credit (including irrevocable standby letters of credit) for
the account of either Borrower (or, if a Letter of Credit is for the account of
a Subsidiary, jointly for the account of the applicable Borrower and such
Subsidiary), and to amend or renew Letters of Credit previously issued by it, in
accordance with subsections 3.2(c) and 3.2(d), and (B) to honor properly drawn
drafts under the Letters of Credit; and (ii) the Revolving Facility Lenders
severally agree to participate in Letters of Credit Issued for the accounts of
the Borrowers (including any Letter of Credit issued jointly for the account of
a Borrower and any Subsidiary); provided, however, that the L/C Lender shall not
be obligated to Issue, and no Lender shall be obligated to participate in, any
Letter of Credit if as of the date of Issuance of such Letter of Credit (the
"Issuance Date") (1) the Effective Amount of all L/C
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Obligations, plus (without duplication) the outstanding principal Dollar
Equivalent amount of all Revolving Loans and Swing Line Loans exceeds the
combined Revolving Facility Commitments of all Revolving Facility Lenders, (2)
the participation of such Revolving Facility Lender in the Effective Amount of
all L/C Obligations, plus (without duplication) the outstanding principal Dollar
Equivalent amount of the Revolving Loans of such Revolving Facility Lender, plus
such Revolving Facility Lender's Pro Rata Share of the Dollar Equivalent amount
of all outstanding Swing Line Loans exceeds such Revolving Facility Lender's
Revolving Facility Commitment, or (3) the Effective Amount of all L/C
Obligations exceeds the L/C Commitment. Within the foregoing limits, and subject
to the other terms and conditions hereof, the Borrowers' ability to obtain
Letters of Credit shall be fully revolving, and, accordingly, the Borrowers may,
during the foregoing period, obtain Letters of Credit to replace Letters of
Credit which have expired or which have been drawn upon and reimbursed.
(b) The L/C Lender is under no obligation to Issue any Letter of
Credit if: (i) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the L/C Lender from
Issuing such Letter of Credit, or any Requirement of Law applicable to the L/C
Lender or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over the L/C Lender shall prohibit,
or request that the L/C Lender refrain from, the Issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the L/C
Lender with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Lender is not otherwise compensated hereunder)
not in effect on the Closing Date, or shall impose upon the L/C Lender any
unreimbursed loss, cost or expense which was not applicable on the Closing Date
and which the L/C Lender in good faith deems material to it; (ii) the L/C Lender
has received written notice from any Lender, the Administrative Agent or either
Borrower, on or prior to the Business Day prior to the requested date of
Issuance of such Letter of Credit, that one or more of the applicable conditions
contained in Article V is not then satisfied; (iii) the expiry date of any
requested Letter of Credit is (A) more than twelve months after the date of such
Issuance for standby Letters of Credit or more than 180 days after the date of
such issuance for commercial documentation Letters of Credit, unless the
Required Revolving Facility Lenders have approved such expiry date in writing;
provided, however, that any standby Letter of Credit may be automatically
extendible for periods of up to one year so long as such Letter of Credit
provides that the L/C Lender retains an option reasonably satisfactory to the
L/C Lender, to terminate such Letter of Credit prior to each extension date, or
(B) after the fifth Business Day prior to the Termination Date, unless all of
the Revolving Facility Lenders have approved such expiry date in writing; (iv)
any requested Letter of Credit does not provide for drafts, or is not otherwise
in form and substance reasonably acceptable to the L/C Lender, or the Issuance
of a Letter of Credit shall violate any applicable policies of the L/C Lender;
(v) such Letter of Credit is denominated in a currency other than Offshore
Currency; or (vi) an Event of Default or Unmatured Event of Default has occurred
and is continuing.
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(c) Notwithstanding the foregoing, in the event a Lender Default
exists, the L/C Lender shall not be required to issue any Letter of Credit
unless the L/C Lender has entered into arrangements satisfactory to it and the
Borrowers to eliminate the L/C Lender's risk with respect to the participation
in Letters of Credit of the Defaulting Lender or Lenders, including by cash
collateralizing such Defaulting Lender's or Lenders' Pro Rata Share of the L/C
Obligations.
3.2. Issuance, Amendment and Renewal of Letters of Credit. (a) Each
Letter of Credit shall be Issued upon the irrevocable written request of the
applicable Borrower received by the L/C Lender (with a copy sent by the
applicable Borrower to the Administrative Agent) at least three Business Days
(or such shorter time as the L/C Lender may agree in a particular instance in
its sole discretion) prior to the proposed date of Issuance. Each such request
for Issuance of a Letter of Credit shall be by facsimile, confirmed in an
original writing, in the form of an L/C Application, and shall specify in form
and detail reasonably satisfactory to the L/C Lender: (i) the proposed date of
Issuance of the Letter of Credit (which shall be a Business Day); (ii) the face
amount of the Letter of Credit; (iii) the expiry date of the Letter of Credit;
(iv) the name and address of the beneficiary thereof; (v) the documents to be
presented by the beneficiary of the Letter of Credit in case of any drawing
thereunder; (vi) the full text of any certificate to be presented by the
beneficiary in case of any drawing thereunder; (vii) the type of Letter of
Credit; and (viii) such other matters as the L/C Lender may reasonably require.
(b) At least two Business Days prior to the Issuance of any Letter
of Credit, the L/C Lender will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a copy of
the L/C Application or L/C Amendment Application from the applicable Borrower
and, if not, the L/C Lender will provide the Administrative Agent with a copy
thereof. Unless the L/C Lender has received, on or before the Business Day
immediately preceding the date the L/C Lender is to Issue a requested Letter of
Credit, (A) notice from the Administrative Agent directing the L/C Lender not to
Issue such Letter of Credit because such Issuance is not then permitted under
subsection 3.1(a) as a result of the limitations set forth in clauses (1)
through (3) thereof or (B) a notice described in subsection 3.1(b)(ii), then,
subject to the terms and conditions hereof, the L/C Lender shall, on the
requested date, Issue a Letter of Credit for the account of the applicable
Borrower (or jointly for the account of the applicable Borrower and the
applicable Subsidiary) in accordance with the L/C Lender's usual and customary
business practices.
(c) From time to time while a Letter of Credit is outstanding and
prior to the Termination Date, the L/C Lender will, upon the written request of
the applicable Borrower received by the L/C Lender (with a copy sent by the
applicable Borrower to the Administrative Agent) at least three days (or such
shorter time as the L/C Lender may agree in a particular instance in its sole
discretion) prior to the proposed date of amendment, amend any Letter of
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Credit Issued by it. Each such request for amendment of a Letter of Credit shall
be made by facsimile, confirmed immediately in an original writing, made in the
form of an L/C Amendment Application and shall specify in form and detail
reasonably satisfactory to the L/C Lender: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment of the Letter of Credit (which
shall be a Business Day); (iii) the nature of the proposed amendment; and (iv)
such other matters as the L/C Lender may reasonably require. The L/C Lender
shall be under no obligation to amend any Letter of Credit if: (A) the L/C
Lender would have no obligation at such time to Issue such Letter of Credit in
its amended form under the terms of this Agreement; or (B) the beneficiary of
any such Letter of Credit does not accept the proposed amendment to the Letter
of Credit. The Administrative Agent will promptly notify the Revolving Facility
Lenders of the receipt by it of any L/C Application or L/C Amendment
Application.
(d) The L/C Lender and the Revolving Facility Lenders agree that,
while a standby Letter of Credit is outstanding and prior to the Termination
Date, at the option of the applicable Borrower and upon the written request of
the applicable Borrower received by the L/C Lender (with a copy sent by the
applicable Borrower to the Administrative Agent) at least three Business Days
(or such shorter time as the L/C Lender may agree in a particular instance in
its sole discretion) prior to the proposed date of notification of renewal, the
L/C Lender shall be entitled to authorize the automatic renewal of any Letter of
Credit Issued by it. Each such request for renewal of a Letter of Credit shall
be made by facsimile, confirmed in an original writing, in the form of an L/C
Amendment Application, and shall specify in form and detail reasonably
satisfactory to the L/C Lender: (i) the standby Letter of Credit to be renewed;
(ii) the proposed date of notification of renewal of the Letter of Credit (which
shall be a Business Day not more than 60 days prior to the expiry date of the
Letter of Credit being renewed); (iii) the revised expiry date of the Letter of
Credit; and (iv) such other matters as the L/C Lender may reasonably require.
The L/C Lender shall be under no obligation so to renew any Letter of Credit if:
(A) the L/C Lender would have no obligation at such time to Issue or amend such
Letter of Credit in its renewed form under the terms of this Agreement; or (B)
the beneficiary of any such Letter of Credit does not accept the proposed
renewal of the Letter of Credit. If any outstanding Letter of Credit shall
provide that it shall be automatically renewed unless the beneficiary thereof
receives notice from the L/C Lender that such Letter of Credit shall not be
renewed, and if at the time of renewal the L/C Lender would be entitled to
authorize the automatic renewal of such Letter of Credit in accordance with this
subsection 3.2(d) upon the request of the applicable Borrower but the L/C Lender
shall not have received any L/C Amendment Application from the applicable
Borrower with respect to such renewal or other written direction by the
applicable Borrower with respect thereto, the L/C Lender shall nonetheless be
permitted to allow such Letter of Credit to renew, and the applicable Borrower
and the Revolving Facility Lenders hereby authorize such renewal, and,
accordingly, the L/C
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Lender shall be deemed to have received an L/C Amendment Application from the
applicable Borrower requesting such renewal.
(e) The L/C Lender may, at its election (or as required by the
Administrative Agent at the direction of the Required Revolving Facility
Lenders), deliver any notices of termination or other communications to any
Letter of Credit beneficiary or transferee, and take any other reasonable
action, at any time and from time to time, in order to cause the expiry date of
such Letter of Credit to be a date not later than the fifth Business Day prior
to the Termination Date.
(f) This Agreement shall control in the event of any conflict with
any L/C-Related Document (other than any Letter of Credit).
(g) The L/C Lender will also deliver to the Administrative Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or amendment
to or renewal of a Letter of Credit.
3.3. Risk Participations, Drawings and Reimbursements. (a)
Immediately upon the Issuance of each Letter of Credit, each Revolving Facility
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the L/C Lender a participation in such Letter of Credit and each
drawing thereunder in an amount equal to the product of (i) the Pro Rata Share
of such Revolving Facility Lender times (ii) the maximum amount available to be
drawn under such Letter of Credit and the amount of such drawing, respectively.
(b) In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the L/C Lender will promptly
notify the applicable Borrower. The applicable Borrower shall reimburse the L/C
Lender prior to 1:00 p.m. (New York City time), on each date that any amount is
paid by the L/C Lender under any Letter of Credit (each such date, an "Honor
Date"), in an amount equal to the amount so paid by the L/C Lender. In the event
the applicable Borrower fails to reimburse the L/C Lender for the full amount of
any drawing under any Letter of Credit by 1:00 p.m. (New York City time) on the
Honor Date, the L/C Lender will promptly notify the Administrative Agent and the
Administrative Agent will promptly notify each Lender thereof. Thereupon the
applicable Borrower shall be deemed to have requested that Revolving Loans be
made by the Revolving Facility Lenders to be disbursed on the Honor Date under
such Letter of Credit, subject to the amount of the unutilized portion of the
Revolving Facility Commitment and subject to the conditions set forth in
subsections 5.2(b) and (c), which Loans shall be ABR Loans accruing interest at
a rate per annum equal to the Alternate Base Rate, plus the Applicable Margin
for ABR Loans which are Revolving Loans, in the case of a drawing in U.S.
Dollars, or Loans accruing interest at a rate per annum equal
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to the Overnight Rate applicable to such Offshore Currency from time to time in
effect, plus the Applicable Margin for Offshore Rate Committed Loans which are
Revolving Loans, in the case of a drawing in an Offshore Currency. Any notice
given by the L/C Lender or the Administrative Agent pursuant to this subsection
3.3(b) may be oral if immediately confirmed in writing (including by facsimile);
provided, however, that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(c) Each Revolving Facility Lender shall upon any notice pursuant to
subsection 3.3(b) make available to the Administrative Agent for the account of
the L/C Lender an amount in U.S. Dollars or the Offshore Currency in which such
Letter of Credit is denominated, as the case may be, and in Same Day Funds equal
to its Pro Rata Share of the amount of the drawing, whereupon the participating
Revolving Facility Lenders shall (subject to subsection 3.3(d)) each be deemed
to have made a Revolving Loan to the applicable Borrower in that amount accruing
interest at a rate per annum equal to the Alternate Base Rate, plus the
Applicable Margin for ABR Loans which are Revolving Loans (in the case of a
drawing in U.S. Dollars), or the Overnight Rate applicable to such Offshore
Currency from time to time in effect, plus the Applicable Margin for Offshore
Rate Committed Loans which are Revolving Loans (in the case of a drawing in an
Offshore Currency). If any Revolving Facility Lender so notified fails to make
available to the Administrative Agent for the account of the L/C Lender the
amount of such Revolving Facility Lender's Pro Rata Share of the amount of the
drawing by no later than 1:00 p.m. (New York time) on the Honor Date, then
interest shall accrue on such Revolving Facility Lender's obligation to make
such payment, from the Honor Date to the date such Revolving Facility Lender
makes such payment, at a rate per annum equal to (i) in the case of a drawing in
U.S. Dollars, the U.S. Federal Funds Rate in effect from time to time during
such period and (ii) in the case of a drawing in an Offshore Currency, the
Overnight Rate applicable to such Offshore Currency from time to time in effect.
The Administrative Agent will promptly give notice of the occurrence of the
Honor Date, but failure of the Administrative Agent to give any such notice on
the Honor Date or in sufficient time to enable any Revolving Facility Lender to
effect such payment on such date shall not relieve such Revolving Facility
Lender from its obligations under this Section 3.3.
(d) With respect to any unreimbursed drawing that is not converted
into Revolving Loans to the applicable Borrower in whole or in part, because of
such Borrower's failure to satisfy the conditions set forth in subsections
5.2(b) and (c) or for any other reason, such Borrower shall be deemed to have
incurred from the L/C Lender an L/C Borrowing in the amount of such drawing,
which L/C Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at a rate per annum equal to (i) in the case of a
drawing in U.S. Dollars, the Alternate Base Rate, plus 2% per annum, and (ii) in
the case of a drawing in an Offshore Currency, the Overnight Rate applicable to
such Offshore Currency from time to time in effect, plus 2% per annum, and each
Revolving Facility Lender's payment to the L/C
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Lender pursuant to subsection 3.3(c) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from
such Revolving Facility Lender in satisfaction of its participation obligation
under this Section 3.3.
(e) Each Revolving Facility Lender's obligation in accordance with
this Agreement to make the Revolving Loans or L/C Advances, as contemplated by
this Section 3.3, as a result of a drawing under a Letter of Credit, shall be
absolute and unconditional and without recourse to the L/C Lender and shall not
be affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Revolving Facility Lender may have
against the L/C Lender, the applicable Borrower or any other Person for any
reason whatsoever; (ii) the occurrence or continuance of an Event of Default, an
Unmatured Event of Default or a Material Adverse Effect; or (iii) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing; provided, however, that each Revolving Facility Lender's
obligation to make Revolving Loans under this Section 3.3 is subject to the
conditions set forth in Section 5.2.
3.4. Repayment of Participations. (a) Upon (and only upon) receipt
by the Administrative Agent for the account of the L/C Lender of Same Day Funds
from the applicable Borrower (i) in reimbursement of any payment made by the L/C
Lender under the Letter of Credit with respect to which any Revolving Facility
Lender has paid the Administrative Agent for the account of the L/C Lender for
such Revolving Facility Lender's participation in the Letter of Credit pursuant
to Section 3.3 or (ii) in payment of interest thereon, the Administrative Agent
will pay to each Revolving Facility Lender, in the same funds as those received
by the Administrative Agent for the account of the L/C Lender, the amount of
such Revolving Facility Lender's Pro Rata Share of such funds, and the L/C
Lender shall receive the amount of the Pro Rata Share of such funds of any
Revolving Facility Lender that did not so pay the Administrative Agent for the
account of the L/C Lender.
(b) If the Administrative Agent or the L/C Lender is required at any
time to return to the applicable Borrower, or to a trustee, receiver, liquidator
or custodian, or any official in any Insolvency Proceeding, any portion of any
payment made by such Borrower to the Administrative Agent for the account of the
L/C Lender pursuant to subsection 3.4(a) in reimbursement of a payment made
under any Letter of Credit or interest or fee thereon, each Revolving Facility
Lender shall, on demand of the Administrative Agent, forthwith return to the
Administrative Agent or the L/C Lender the amount of its Pro Rata Share of any
amount so returned by the Administrative Agent or the L/C Lender plus interest
thereon from the date such demand is made to the date such amount is returned by
such Revolving Facility Lender to the Administrative Agent or the L/C Lender, at
a rate per annum equal to the U.S. Federal Funds Rate in effect from time to
time.
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3.5. Role of the L/C Lender. (a) Each Revolving Facility Lender and
the Borrowers agree that, in paying any drawing under a Letter of Credit, the
L/C Lender shall not have any responsibility to obtain any document (other than
any sight draft and certificates or other documents expressly required by the
Letter of Credit) or to ascertain or inquire as to the validity or accuracy of
any such document or the authority of the Person executing or delivering any
such document.
(b) None of the Agents, any of their respective Affiliates or any of
the respective correspondents, participants or assignees of the L/C Lender shall
be liable to any Revolving Facility Lender for: (i) any action taken or omitted
in connection herewith at the request or with the approval of the Revolving
Facility Lenders (including the Required Revolving Facility Lenders, as
applicable); (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.
(c) Each Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided, however, that this assumption is not intended to, and shall
not, preclude a Borrower's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the Agents, any of their respective Affiliates or any of the respective
correspondents, participants or assignees of the L/C Lender shall be liable or
responsible for any of the matters described in clauses (i) through (vi) of
Section 3.6; provided, however, that, anything in such clauses to the contrary
notwithstanding, a Borrower may have a claim against the L/C Lender, and the L/C
Lender may be liable to such Borrower, to the extent, but only to the extent, of
any direct, as opposed to consequential or exemplary, damages suffered by such
Borrower which such Borrower proves were caused directly by the L/C Lender's
willful misconduct or gross negligence or the L/C Lender's willful failure to
pay under any Letter of Credit after the presentation to it by the beneficiary
of a sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. In furtherance and not in limitation of the
foregoing: (i) the L/C Lender may accept documents that appear on their face to
be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary; and (ii) the L/C Lender shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.
3.6. Obligations Absolute. The obligations of the Borrowers under
this Agreement and any L/C-Related Document to reimburse the L/C Lender for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Committed Loans, shall be unconditional
and irrevocable, and shall be paid
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strictly in accordance with the terms of this Agreement and each such other
L/C-Related Document under all circumstances, including the following: (i) any
lack of validity or enforceability of this Agreement or any L/C-Related
Document; (ii) the existence of any claim, set-off, defense or other right that
a Borrower may have at any time against any beneficiary or any transferee of any
Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the L/C Lender or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by the
L/C-Related Documents or any unrelated transaction; (iii) any draft, demand,
certificate or other document presented under any Letter or Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit; or (iv) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, a Borrower or a guarantor; provided, however, that the Borrowers
shall not be obligated to reimburse the L/C Lender for any wrongful payment made
by the L/C Lender as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of the L/C Lender.
3.7. Cash Collateral Pledge. If any Letter of Credit remains
outstanding and partially or wholly undrawn as of the Termination Date, then the
Borrowers shall immediately Cash Collateralize the L/C Obligations in an amount
equal to the maximum amount then available to be drawn under all Letters of
Credit.
3.8. Letter of Credit Fees. (a) The applicable Borrower shall pay to
the Administrative Agent for the account of each of the Revolving Facility
Lenders a letter of credit fee with respect to the Letters of Credit at a rate
per annum equal to the then Applicable Margin for Offshore Rate Committed Loans
which are Revolving Facility Loans of the average daily maximum amount available
to be drawn of the outstanding Letters of Credit, computed on a quarterly basis
in arrears on the last Business Day of each calendar quarter and on the
Termination Date (or such later date on which all outstanding Letters of Credit
have been terminated or have expired) based upon Letters of Credit outstanding
for the applicable period as calculated by the Administrative Agent.
(b) The applicable Borrower shall pay to the Administrative Agent
for the account of the L/C Lender a letter of credit fronting fee for each
Letter of Credit Issued by the L/C Lender at the rate per annum equal to 1/4% of
the average daily maximum amount available to be drawn of the outstanding
Letters of Credit, computed on the last Business Day of each calendar quarter
and on the Termination Date (or such later date on which all outstanding Letters
of Credit have been terminated or have expired) based upon the Letters of Credit
outstanding
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for the applicable period as calculated by the Administrative Agent, which fee
shall be credited against the fee payable under subsection 3.8(a).
(c) The letter of credit fees payable under subsection 3.8(a) and
the fronting fees payable under subsection 3.8(b) shall be due and payable
quarterly in arrears on the last Business Day of each calendar quarter during
which Letters of Credit are outstanding, commencing on the first such quarterly
date to occur after the Closing Date, through the Termination Date (or such
later date upon which all outstanding Letters of Credit have been terminated or
have expired), with the final payment to be made on the Termination Date (or
such later termination or expiration date).
(d) The Borrowers shall pay to the L/C Lender from time to time on
demand the normal issuance, presentation, amendment and other processing fees,
and other standard costs and charges, of the L/C Lender relating to letters of
credit as from time to time in effect.
3.9. Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits as published by the International Chamber of Commerce
most recently at the time of issuance of any Letter of Credit shall (unless
otherwise expressly provided in such Letter of Credit) apply to such Letter of
Credit.
3.10. Letters of Credit for the Account of Subsidiaries. Each
Borrower and its applicable Subsidiary shall be jointly and severally liable for
any Letter of Credit which is issued jointly for the account of that Borrower
and any of its Subsidiaries.
ARTICLE IV.
NET PAYMENTS, YIELD PROTECTION AND ILLEGALITY
4.1. Net Payments. (a) Except as provided in subsection 4.1(b), all
payments by the Borrowers to any Lender or any Agent under this Agreement and
any other Loan Document shall be made free and clear of, and without deduction
or withholding for, any Covered Taxes levied or imposed by any Governmental
Authority with respect to such payments.
(b) If a Borrower shall be required by law to deduct or withhold any
Covered Taxes from or in respect of any sum payable hereunder to any Lender or
any Agent, then except as provided in subsection 4.1(g): (i) the sum payable
shall be increased as necessary so that after making all such required
deductions and withholdings (including deductions and withholdings applicable to
additional sums payable under this Section) such Lender or such Agent, as the
case may be, receives an amount equal to the sum it would have received had no
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such deductions or withholdings been made; (ii) such Borrower shall make such
deductions and withholdings; and (iii) such Borrower shall pay the full amount
deducted or withheld to the relevant taxing authority or other authority in
accordance with applicable law. If for any reason CH Borrower fails to make any
payments required under the preceding sentence, then US Borrower shall make such
payments on behalf of CH Borrower. Within 30 days after the date of any payment
by a Borrower of Covered Taxes, such Borrower shall furnish the Administrative
Agent the original or a certified copy of a receipt evidencing payment thereof,
or other evidence of payment reasonably satisfactory to the Administrative
Agent.
(c) The Borrowers agree to indemnify and hold harmless each Lender
and each Agent for (i) the full amount of Covered Taxes (including any Covered
Taxes imposed by any jurisdiction on amounts payable under this Section) paid by
such Lender or such Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Covered Taxes were correctly or legally asserted, and (ii)
any Taxes levied or imposed by any Governmental Authority on any additional
amounts paid by either Borrower under this Section 4.1 that are measured by such
Lender's or such Agent's net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Lender or such Agent, as the
case may be, is organized or maintains a Lending Office.
(d) If a Lender or an Agent receives a refund or credit of Taxes
paid or indemnified by a Borrower pursuant to subsection (b) or (c) of this
Section 4.1, then such Lender or such Agent shall promptly repay the Borrowers
such refund or credit (whether paid pursuant to subsection (b) or (c) of this
Section 4.1 and whether of the type described in either clause (i) or (ii) of
such subsection (c)) net of all out-of-pocket expenses related thereto and
without interest (other than interest received as part of such refund or
credit); provided, however, that if, due to any adjustment of such Taxes (or of
any liability, including penalties, interest, additions to tax and expenses,
arising therefrom or with respect thereto), such Lender or such Agent loses the
benefit of all or any portion of such refund or credit, the Borrowers will
indemnify and hold harmless such Lender or such Agent in accordance with this
subsection. A certificate as to the amount of any such required indemnification
payment prepared with a reasonable basis by the Lender or such Agent shall be
final, conclusive and binding for all purposes. Payment under this
indemnification shall be made within 30 days after the date such Lender or such
Agent makes written demand therefor by the delivery of such certificate.
(e) If either Borrower is required to pay additional amounts to any
Lender or any Agent pursuant to this Section 4.1, then such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office or take other appropriate action so as to
eliminate any such additional payment by such Borrower which may thereafter
accrue, if such change or other action in the reasonable judgment of such Lender
is not otherwise disadvantageous to such Lender.
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(f)(i) Each Lender or Administrative Agent which is not a United
States person (as such term is defined in Section 7701(a) of the Code) agrees
that:
(A) it shall, no later than the Closing Date (or, in the case of a
Lender which becomes a party hereto after the Closing Date, the date upon
which such Lender becomes a party hereto) deliver to the Administrative
Agent and to the Borrowers through the Administrative Agent (x) two
accurate and complete signed originals of Internal Revenue Service Form
4224 or any successor thereto ("Form 4224"), or two accurate and complete
signed originals of Internal Revenue Service Form 1001 or any successor
thereto ("Form 1001"), as appropriate, or (y) if such Lender is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot
deliver either Form 1001 or Form 4224 pursuant to clause (x) above, a
certificate substantially in the form of Exhibit L-1 (any such
certificate, a "Section 4.1(f)(i) Certificate") and, in the case of either
(x) or (y), two accurate and complete original signed copies of Internal
Revenue Service Form W-8 or any successor thereto ("Form W-8") or Internal
Revenue Service Form W- 9 or any successor thereto ("Form W-9"), whichever
is applicable;
(B) if at any time such Lender or Administrative Agent makes any
changes necessitating a new Form 4224, Form 1001, Form W-8, Form W-9 or
Section 4.1(f)(i) Certificate, as the case may be, it shall with
reasonable promptness deliver to the Administrative Agent and to the
Borrowers through the Administrative Agent in replacement for, or in
addition to, the forms previously delivered by it hereunder, two accurate
and complete signed originals of Form 4224, Form 1001, Form W-8, Form W-9
or Section 4.1(f)(i) Certificate, as appropriate; and
(C) it shall, before or promptly after the occurrence of any event
(including the passing of time (and in any event (x) in the case of a Form
4224 or Section 4.1(f)(i) Certificate, before the payment of any interest
in each succeeding taxable year of such Lender after the Closing Date
during which interest may be paid under this Agreement, and (y) in the
case of a Form 1001, before the payment of any interest in each third
succeeding calendar year after the Closing Date during which interest may
be paid under this Agreement) but excluding any event mentioned in clause
(B) above) requiring a change in or renewal of the most recent Form 4224,
Form 1001, Form W-8, Form W-9 or Section 4.1(f)(i) Certificate, previously
delivered by such Lender or Administrative Agent, deliver to the
Administrative Agent and to the Borrowers through the Administrative Agent
two accurate and complete original signed copies of Form 4224, Form 1001,
or Form W-8 and a Section 4.1(f)(i) Certificate, in replacement for the
forms previously delivered by such Lender or Administrative Agent.
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(ii) Each Lender that is incorporated or organized under the laws of
the United States of America or a state thereof shall provide two properly
completed and duly executed copies of Form W-9, or successor applicable form, at
the times specified for delivery of forms under paragraph (f)(i) of this
subsection.
(iii) Each Form 1001 or 4224 delivered by a Lender or Administrative
Agent pursuant to this subsection (f) shall certify, unless unable to do so by
virtue of a Change in Law occurring after the date such Lender becomes a party
hereto, that the Lender or Administrative Agent is entitled to receive payments
under this Agreement without deduction or withholding of U.S. federal income
taxes and each Form W-9 shall certify, unless unable to do so by virtue of a
Change in Law occurring after the date such Lender or Administrative Agent
becomes a party hereto, that such Lender or Administrative Agent is entitled to
an exemption from U.S. backup withholding.
(iv) Notwithstanding the foregoing provisions of this subsection (f)
or any other provision of this Section 4.1, no Lender or Administrative Agent
shall be required to deliver any form pursuant to this Section 4.1 if such
Lender or Administrative Agent is not legally able to do so by virtue of a
Change in Law occurring after the date such Lender or Administrative Agent
becomes a party hereto.
(v) Each Revolving Facility Lender, Tranche A-1 Lender, Tranche A-2
Lender and Tranche C(CH) Lender shall, no later than the Closing Date (or, in
the case of any such Lender which becomes a party hereto after the Closing Date,
the date upon which such Lender becomes a party hereto) deliver a certificate
substantially in the form of Exhibit L-2 (any such certificate, a "Section
4.1(f)(v) Certificate"); provided, however, that if each Tranche C(CH) Lender
lends in a minimum dollar equivalent of U.S. $5,000,000, no Tranche C(CH) Lender
shall be required to deliver such certificate. Each Lender delivering a Section
4.1(f)(v) Certificate further agrees to deliver a new Section 4.1(f)(v)
Certificate at the times specified for delivery of a Section 4.1(f)(i)
Certificate under subsections (f)(i)(B) and (C) of this Section 4.1, unless it
is unable to do so by virtue of a Change in Law occurring after the date such
Lender becomes a party hereto.
(vi) Each Lender shall, promptly upon a Borrower's or the
Administrative Agent's reasonable request to that effect, deliver to such
Borrower or the Administrative Agent (as the case may be) such other forms or
similar documentation or other information as may be required from time to time
by any applicable law, treaty, rule or regulation of any Governmental Authority
in order to establish such Lender's tax status for withholding purposes.
(g) No Borrower will be required to pay any additional amount in
respect of Taxes pursuant to this Section 4.1 to any Lender or to the Agent or
Administrative Agent with
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respect to any Lender if the obligation to pay such additional amount would not
have arisen but for a failure by such Lender to comply with its obligations
under subsection 4.1(f) or Section 11.8.
(h) Each Lender agrees to indemnify and hold harmless the Borrowers
and each Agent from and against any Taxes, penalties, interest and other costs
or losses (including, without limitation, reasonable attorneys' fees and
expenses) incurred or payable by the Borrowers or the Agent as a result of the
failure of the Borrowers or the Agent to comply with its obligations to deduct
or withhold any Taxes from any payments made pursuant to this Agreement which
failure resulted from such Borrower's or the Agent's reasonable reliance on any
form, statement, certificate or other information provided to it by such Lender
pursuant to this Section 4.1.
(i) If, at any time, a Borrower requests any Lender to deliver any
forms or other documentation pursuant to subsection 4.1(f)(vi), then such
Borrower shall, on demand of such Lender through the Administrative Agent,
reimburse such Lender for any material costs and expenses (including Attorney
Costs) reasonably incurred by such Lender in the preparation or delivery of such
forms or other documentation.
4.2. Illegality. (a) If any Lender determines that any Change in Law
has made it unlawful, or that any central bank or other Governmental Authority
has asserted that it is unlawful, for such Lender or its applicable Lending
Office to make or maintain Offshore Rate Committed Loans in any Applicable
Currency then, on notice thereof by the Lender to the Borrowers through the
Administrative Agent, any obligation of such Lender to make, convert or continue
Offshore Rate Committed Loans in such Applicable Currency shall be suspended
until such Lender notifies the Administrative Agent and the Borrowers that the
circumstances giving rise to such determination no longer exist and until such
time such Lender's commitment shall be only to make an ABR Loan when an Offshore
Rate Committed Loan is requested in such Applicable Currency. The Administrative
Agent shall, if possible, to the extent necessary in order to excuse such Lender
from making, maintaining or converting a Loan in such Applicable Currency and to
continue to make available to the Borrowers the full requested amount of Loans
in such Applicable Currency, reallocate from time to time among the Lenders
within the same tranche the outstanding Loans denominated in such Applicable
Currency and Loans denominated in other currencies.
(b) If a Lender determines that it is unlawful to maintain any
Offshore Rate Committed Loan in any Applicable Currency, (x) with respect to any
such Offshore Rate Committed Loan that is an Offshore U.S. Dollar Loan, such
Loan shall be automatically converted to an ABR Loan either on the last day of
the Interest Period therefor, if such Lender may lawfully continue to maintain
such Offshore Rate Committed Loan to such day, or
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immediately if such Lender may not lawfully continue to maintain such Offshore
Rate Committed Loan and (y) with respect to any other Offshore Rate Committed
Loan, the Borrowers shall, upon their receipt of notice of such fact and demand
from such Lender (with a copy to the Administrative Agent), prepay in full such
Offshore Rate Committed Loans of such Lender then outstanding in such Applicable
Currency, together with interest accrued thereon and amounts required under
Section 4.4, either on the last day of the Interest Period therefor, if such
Lender may lawfully continue to maintain such Offshore Rate Committed Loan to
such day, or immediately, if such Lender may not lawfully continue to maintain
such Offshore Rate Committed Loan. Notwithstanding the foregoing, the
Administrative Agent shall, if possible, to the extent necessary in order to
excuse such Lender from making, maintaining or converting a Loan in such
Applicable Currency and to continue to make available to the Borrowers the full
requested amount of Loans in such Applicable Currency, reallocate from time to
time among the Lenders within the same tranche the outstanding Loans denominated
in such Applicable Currency and Loans denominated in other currencies.
(c) Before giving any notice to the Administrative Agent under this
Section, the affected Lender shall designate a different Lending Office with
respect to its Offshore Rate Committed Loans or take other appropriate action if
such designation or other action will avoid the need for giving notice and will
not, in the judgment of such Lender, be illegal or otherwise disadvantageous to
such Lender.
4.3. Increased Costs and Reduction of Return. (a) If any Lender
determines that, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) the compliance by such
Lender with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), in either case after the
date of this Agreement there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining any Offshore Rate Committed
Loan or participating in Letters of Credit, or, in the case of the L/C Lender,
any increase in the cost to the L/C Lender of agreeing to issue, issuing or
maintaining any Letter of Credit or of agreeing to make or making, funding or
maintaining any unpaid drawing under any Letter of Credit, then the Borrowers
shall be liable for, and shall from time to time, upon demand (which demand
shall contain a reasonably detailed calculation of any relevant costs and shall
be conclusive and binding in the absence of manifest error, and a copy thereof
shall be sent to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender, additional amounts as are sufficient to compensate
such Lender for such increased costs; provided, however, that CH Borrower shall
only be liable for those additional amounts relating to the Obligations of CH
Borrower and each CH Foreign Subsidiary.
(b) If any Lender shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in
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the interpretation or administration of any Capital Adequacy Regulation by any
central bank or other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by such Lender (or its Lending
Office) or any corporation controlling such Lender with any Capital Adequacy
Regulation, in each case after the date of this Agreement, affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
determines that the amount of such capital is increased as a consequence of its
Commitment, Loans, credits or obligations under this Agreement, then, upon
demand of such Lender to the Borrowers through the Administrative Agent, the
Borrowers shall pay to such Lender, from time to time as specified by such
Lender, additional amounts reasonably sufficient to compensate such Lender for
such increase; provided, however, that CH Borrower shall only be liable for
those additional amounts relating to the Obligations of CH Borrower and each CH
Foreign Subsidiary. A statement of such Lender as to any such additional amount
or amounts (including calculations thereof in reasonable detail), in the absence
of manifest error, shall be conclusive and binding on the Borrowers. In
determining such amount or amounts, such Lender may use any method of averaging
and attribution that it (in its sole and absolute discretion) shall deem
applicable.
(c) Nothing in this Section 4.3 shall obligate either Borrower to
make any payments with respect to Taxes of any sort, indemnification for which
is governed by Section 4.1.
4.4. Funding Losses. The applicable Borrower shall, within five days
of receipt of written notice thereof, reimburse each Lender and hold each Lender
harmless from any loss or expense which such Lender may sustain or incur as a
consequence of: (a) the failure of such Borrower to make on a timely basis any
payment of principal of any Offshore Rate Committed Loan; (b) the failure
(including by reason of Section 4.5) of such Borrower to borrow, continue or
convert an Offshore Rate Committed Loan after such Borrower has given (or is
deemed to have given) a Notice of Committed Borrowing or a Notice of
Conversion/Continuation (other than any such failure arising as a result of a
default by such Lender or the Administrative Agent); (c) the failure of such
Borrower to make any prepayment of any Committed Loan in accordance with any
notice delivered under Section 2.7; (d) the prepayment (including pursuant to
Section 2.7 or 2.8) or other payment (including after acceleration thereof) the
principal of any Offshore Rate Committed Loan on a day that is not the last day
of the relevant Interest Period; or (e) the conversion under Section 2.4 of any
Offshore Rate Committed Loan to an ABR Loan on a day that is not the last day of
the relevant Interest Period; including any such loss or expense arising from
the liquidation or reemployment of deposits or other funds obtained by it to
make, continue or maintain the applicable Loans or from fees payable to
terminate the deposits from which such funds were obtained. Such written notice
(which shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and
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binding on the Borrowers. For purposes of calculating amounts payable by the
applicable Borrower to any Lender under this Section and under subsection
4.3(a), each Offshore Rate Committed Loan made by a Lender (and each related
reserve, special deposit or similar requirement) shall be conclusively deemed to
have been funded at the Offshore Rate used in determining the interest rate for
such Offshore Rate Committed Loan by a matching deposit or other borrowing in
the interbank eurodollar market for a comparable amount and for a comparable
period and in the same Applicable Currency, whether or not such Offshore Rate
Committed Loan is in fact so funded.
4.5. Inability to Determine Rates. (a) If the Required Revolving
Facility Lenders or Lenders holding a majority of the Loans under the Tranche B
Term Loan Facility, the Tranche C(CH) Term Loan Facility, the Tranche C(US) Term
Loan Facility or the Tranche D Term Loan Facility determine that for any reason
adequate and reasonable means do not exist for determining the Offshore Rate for
any requested Interest Period with respect to a proposed Offshore Rate Committed
Loan under the applicable Facility, the Administrative Agent will promptly so
notify the applicable Borrower and each Lender under such Facility. Thereafter,
the obligation of the Lenders under such Facility to make, convert or maintain
Offshore Rate Committed Loans in the Applicable Currency shall be suspended
until the Administrative Agent upon the instruction of the Required Revolving
Facility Lenders or Lenders holding a majority of the Loans under the Tranche B
Term Loan Facility, the Tranche C(CH) Term Loan Facility, the Tranche C(US) Term
Loan Facility or the Tranche D Term Loan Facility, as the case may be, revoke
such notice in writing. Upon receipt of such notice, the applicable Borrower may
revoke any Notice of Committed Borrowing or Notice of Conversion/Continuation
then submitted by it. If the applicable Borrower does not revoke (x) any such
Notice of Committed Borrowing for Revolving Loans or (y) any such Notice of
Conversion/Continuation with respect solely to Offshore U.S. Dollar Loans, the
Lenders shall make, convert or continue the applicable Loans, as proposed by
such Borrower, in the amount specified in the applicable notice submitted by
such Borrower, but such Loans shall be made, converted or continued as ABR Loans
instead of Offshore Rate Committed Loans, and in the case of any Offshore
Currency Loans under the Revolving Facility, the Borrowing shall be in an
aggregate amount equal to the Dollar Equivalent amount of the originally
requested Borrowing in the Offshore Currency. If the applicable Borrower does
not revoke any Notice of Conversion/Continuation with respect to any outstanding
Revolving Loans that are Offshore Currency Loans which are the subject of any
such continuation, such Offshore Currency Loans shall bear interest at a rate
per annum equal to the Applicable Margin for Offshore Rate Committed Loans which
are Revolving Loans, plus the Overnight Rate for the Applicable Currency as in
effect from time to time or such other rate as may be agreed to between the
Borrowers and the Required Revolving Facility Lenders, and specified to the
Administrative Agent from time to time.
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(b) If Lenders holding a majority of the Tranche A-1 Term Loans or
Tranche A-2 Term Loans determine that for any reason adequate and reasonable
means do not exist for determining the Offshore Rate for any requested Interest
Period with respect to Tranche A-1 Term Loans or Tranche A-2 Term Loans, as the
case may be, the Administrative Agent will promptly so notify the Borrowers and
each Lender under the Tranche A-1 Term Loan Facility and the Tranche A-2 Term
Loan Facility. Thereafter, until the Administrative Agent upon the instruction
of Lenders holding a majority of the Tranche A-1 Term Loans or Tranche A-2 Term
Loans, as the case may be, revokes such notice in writing, the applicable
Tranche A-1 Term Loans or Tranche A-2 Term Loans shall bear interest at a rate
per annum equal to the Applicable Margin for Offshore Rate Committed Loans which
are Revolving Loans, plus the Overnight Rate for the Applicable Currency as in
effect from time to time or such other rate as may be agreed to between the
Borrowers and Lenders holding a majority of the Tranche A-1 Term Loans or
Tranche A-2 Term Loans, as the case may be, and specified to the Administrative
Agent from time to time.
4.6. Reserves on Offshore Rate Committed Loans. The applicable
Borrower shall pay to each Lender, as long as such Lender shall be required
under regulations of the FRB to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as "Eurocurrency liabilities") and, in respect of any Offshore Currency
Loans, under any applicable regulations of the country in which the Offshore
Currency of such Offshore Currency Loans circulates, additional costs on the
unpaid principal amount of each Offshore Rate Committed Loan and Offshore
Currency Loan equal to the actual costs of such reserves allocated to such Loan
by such Lender (as calculated by such Lender in good faith, which calculation
shall be set forth in reasonable detail and shall be conclusive), payable on
each date on which interest is payable on such Loan, provided the applicable
Borrower shall have received at least 15 days' prior written notice (with a copy
to the Administrative Agent) of the amount of such additional interest from such
Lender. If a Lender fails to give notice 15 days prior to the relevant Interest
Payment Date, such additional interest shall be payable 15 days from receipt of
such notice.
4.7. Certificates of Lenders. Any Lender claiming reimbursement or
compensation under this Article IV shall deliver to the applicable Borrower
(with a copy to the Administrative Agent) a certificate (a) setting forth in
reasonable detail the circumstances giving rise to such claim and a computation
of the amount payable to such Lender hereunder in respect thereof and (b)
certifying that such Lender is making similar claims based on such circumstances
to similarly-situated borrowers from such Lender. Any such certificate shall be
conclusive and binding on the applicable Borrower in the absence of manifest
error.
4.8. Substitution of Lenders. Upon (x) the receipt by either
Borrower or the Administrative Agent from any Lender (an "Affected Lender") of a
claim for compensation
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under Section 4.1 or 4.3 (or a Change in Law which could reasonably be
determined to allow a Lender to make such a claim) or a notice of the type
described in subsection 2.5(b), 2.5(c), 4.2(a) or 4.2(b), (y) any Lender
providing notice to the Borrowers that a representation contained in a Section
4.1(f)(i) Certificate or Section 4.1(f)(v) Certificate is no longer true and
correct or (z) the refusal of any Lender to consent to a proposed amendment,
waiver or consent with respect to the Loan Documents which has been approved by
the Required Lenders as provided in subsection 11.1(b), the Borrowers may: (i)
request the Affected Lender to use its best efforts to obtain a replacement bank
or financial institution satisfactory to such Borrower to acquire and assume all
or a ratable part of all of such Affected Lender's Loans, participation in L/C
Obligations and Commitments (a "Replacement Lender"); (ii) request one more of
the other Lenders to acquire and assume all or part of such Affected Lender's
Loans and Commitments; or (iii) designate a Replacement Lender. Any such
designation of a Replacement Lender under clause (i) or (iii) shall be subject
to the prior written consent of the Agents (which consent shall not be
unreasonably withheld).
4.9. Right of Lenders to Fund Through Branches and Affiliates. Each
Lender may, if it so elects, fulfill its commitment as to any Loan hereunder by
designating a branch or Affiliate of such Lender to make such Loan; provided,
however, that (a) such Lender shall remain solely responsible for the
performances of its obligations hereunder, (b) no such designation shall result
in any increased costs to the Borrowers and (c) such branch or Affiliate
complies with all form delivery and other requirements hereunder (including
pursuant to Section 4.1).
ARTICLE V.
CONDITIONS PRECEDENT
5.1. Conditions of Initial Loans. For purposes of this Article V,
the "Subsidiaries" of the Borrowers shall be deemed to include those who will
become Subsidiaries of the Borrowers upon consummation of the Transactions. The
obligation of any Lender to make its initial extension of credit hereunder
(whether by making a Loan or issuing a Letter of Credit) is subject to the
satisfaction of the following conditions:
(a) Credit Agreement; Guarantees; Notes. On the Closing Date, this
Agreement shall have been duly authorized, executed and delivered to the Lenders
by the Borrowers and the Subsidiary Swing Line Borrowers in form and substance
acceptable to the Agents and the Lenders. On the Closing Date there shall have
been duly authorized, executed and delivered to the Lenders in form and
substance satisfactory to the Agents and the Lenders
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(i) the Holding Guarantee by Holding, (ii) the US Borrower Guarantee by US
Borrower, (iii) a Domestic Subsidiary Guarantee by each Domestic Subsidiary,
(iv) CH Borrower Guarantee by CH Borrower and (v) a Foreign Subsidiary Guarantee
by each CH Foreign Subsidiary (other than the Specified Subsidiaries). On or
prior to the Closing there shall have been delivered to the Administrative Agent
for the account of each Lender the appropriate Note, in each case executed by
the appropriate Borrower or Subsidiary Swing Line Borrower and appropriately
completed as to amounts and maturities.
(b) Transactions. (i) The terms, conditions and structure of each of
the Transactions and the Transaction Documents shall be in form and substance
reasonably satisfactory to the Agents. The terms and conditions of each of the
Other Documents shall be in form and substance reasonably satisfactory to the
Agents. The terms and conditions of each of the Other Documents shall be in form
and substance reasonably satisfactory to the Agents.
(ii) US Borrower shall have received aggregate gross cash proceeds
of not less than U.S. $[115] million from the sale of the Senior Subordinated
Notes, Holding shall have consummated the Equity Issuance and contributed the
gross proceeds thereof in cash to US Borrower.
(iii) On the Closing Date, the Transactions shall have been
consummated in all material respects in accordance with the terms of Transaction
Documents (without any waiver of any material provision thereof). Except as set
forth in Schedule 6.17, all Indebtedness of the Mettler-Toledo Group existing
immediately prior to the M-T Acquisition shall be repaid in full (or provision
made therefor) to the reasonable satisfaction of the Agents and all lending
commitments thereunder terminated to the reasonable satisfaction of the Agents
with all security interests in favor of existing lenders being unconditionally
released and evidence therefor shall have been provided to the Agents to their
reasonable satisfaction.
(c) Transaction Documents. A certificate of a Responsible Officer
certifying as of the Closing Date true and complete copies of each of the
Transaction Documents and each of the Other Documents shall have been delivered
to the Agents.
(d) Opinions of Counsel. On the Closing Date, the Lenders shall have
received an opinion or opinions, addressed to the Agents and each of the Lenders
and dated the Closing Date, from (i) Fried, Frank, Harris, Shriver & Jacobson,
counsel to the Loan Parties, which opinion shall cover the matters contained in
Exhibit F-1 and such other matters incident to the transactions contemplated
herein as the Agents may reasonably request, (ii) local counsel to the Foreign
Loan Parties, which opinion shall cover the matters contained in Exhibit F-2 and
such other matters incident to the transactions contemplated herein as the
Agents may reasonably request, (iii) local counsel to the Loan Parties
reasonably satisfactory to the Agents in each
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jurisdiction in which Collateral is located, which opinions shall cover the
matters contained in Exhibit F-3 and such other matters incident to the
transactions contemplated herein and in the other Loan Documents as the Agents
may reasonably request and (iv) such local, foreign and other counsel reasonably
satisfactory to the Agents, which opinions shall cover the perfection of the
security interest granted, the enforceability of the Loan Documents and such
other matters incident to the transactions contemplated herein as the Agents may
reasonably request, and each such opinion shall be in form and substance
reasonably satisfactory to the Agents.
(e) Corporate Documents. The Agents shall have received on or prior
to the Closing Date certified copies of the Organization Documents of each Loan
Party and of all corporate authority for each Loan Party (including board of
director resolutions and evidence of the incumbency, including specimen
signatures, of officers) with respect to the execution, delivery and performance
of such of the Loan Documents to which such Loan Party is intended to be a party
and each other document to be delivered by such Loan Party from time to time in
connection herewith and the extensions of credit hereunder (and the Agents and
each Lender may conclusively rely on such certificate until it receives notice
in writing from such Loan Party to the contrary), the granting of Liens under
the Security Documents, the execution, delivery and performance of the
Transaction Documents and the consummation of the Transactions.
(f) Adverse Change, etc. On or prior to the Closing Date, there
shall not have occurred or become known any material adverse change or any
condition or event that has had or could reasonably be expected to result in (i)
a material adverse change in the business, assets, liabilities (contingent or
otherwise), operations, condition (financial or otherwise) or solvency of US
Borrower and the Subsidiaries (after giving effect to the Transactions), taken
as a whole, or any material adverse change in the prospects of US Borrower and
the Subsidiaries (after giving effect to the Transactions), taken as a whole, in
each case since December 31, 1995 or (ii) a material adverse effect on the
rights or remedies of the Agents or any Lender under the Loan Documents (except
in each case to the extent that the incurrence of the Indebtedness pursuant to
this Agreement and the Senior Subordinated Notes or the consummation of the M-T
Acquisition would be deemed such an event or condition).
(g) Litigation. There shall be no litigation or administrative
proceedings or other legal or regulatory developments, actual or threatened,
that, singly or in the aggregate, would have a Material Adverse Effect, or a
material adverse effect on the ability of the Loan Parties to consummate the
Transactions or the validity or enforceability of the Loan Documents or the
rights, remedies and benefits available to the Agents and the Lenders under the
Loan Documents, or which would be materially inconsistent with the stated
assumptions underlying the projections previously provided to the Agents.
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(h) Approvals. All requisite third parties (including Governmental
Authorities) shall have approved or consented to the Transactions and the other
transactions contemplated hereby to the extent required in each case to the
extent that the failure to obtain such consent or approval would have a Material
Adverse Effect, and there shall be no governmental or judicial action, actual or
threatened, that has or would have, singly or in the aggregate, a reasonable
likelihood of restraining, preventing or imposing burdensome conditions on the
consummation of the Transactions.
(i) Security Documents. (i) On or before the Closing Date, there
shall have been duly authorized, executed and delivered (i) by Holding, the
Holding Securities Pledge Agreement, (ii) by US Borrower, the US Borrower
Securities Pledge Agreement, (iii) by each Domestic Subsidiary which upon giving
effect to the consummation of the M-T Acquisition will hold any capital stock or
notes of any other Subsidiary, a Domestic Subsidiary Securities Pledge Agreement
and (iv) by each CH Foreign Subsidiary which upon giving effect to the
consummation of the M-T Acquisition will hold any capital stock or notes of any
other Subsidiary (other than any Subsidiary listed on Schedule 7.22), a Foreign
Subsidiary Securities Pledge Agreement and there shall have been delivered to
the Administrative Agent, as pledgee thereunder, all of the pledged securities
referred to in any such Securities Pledge Agreement, endorsed in blank in the
case of promissory notes or accompanied by executed and undated stock powers in
the case of certificated capital stock (or otherwise pledged in accordance with
applicable law), and the Securities Pledge Agreements shall be in full force and
effect.
(ii) On or before the Closing Date, the Borrowers and each
Subsidiary executing and delivering a Subsidiary Guarantee (other than any
Subsidiary listed on Schedule 7.22) shall have duly authorized, executed and
delivered a Security Agreement and all such Security Agreements shall be in full
force and effect.
(iii) On or before the Closing Date, the Borrowers shall or shall
cause to be delivered each of the following documents and instruments:
(1) executed copies of Financing Statements (Form UCC-1) (and
foreign equivalents thereof) in appropriate form for filing under the UCC
and any other applicable foreign, domestic or local law, rules or
regulation in each jurisdiction as may be necessary or appropriate to
perfect the security interests purported to be created by the Security
Documents;
(2) certified copies of Requests for Information (Form UCC-11), or
equivalent reports or lien search reports, each of a recent date listing
all effective financing statements or comparable documents that name US
Borrower or any Subsidiary as debtor and that are filed in those
jurisdictions in which any of the Collateral is located and the
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jurisdictions in which US Borrower and its Subsidiaries' principal place
of business is located, none of which encumber the Collateral covered or
intended or purported to be covered by the Security Documents other than
those encumbrances permitted by the Security Documents;
(3) to the extent Inventory is maintained on a leased premise,
agreements from the respective landlords of such of the Real Property
which is being leased by any Loan Party confirming that such landlords
have subordinated their landlord liens in such personal property to the
security interests held by Administrative Agent pursuant to the applicable
Security Documents and that such landlords will provide Administrative
Agent with reasonable access to such facilities to exercise Administrative
Agent's remedies pursuant to such applicable Security Documents; and
(4) evidence of the completion of all recordings and filings of, or
with respect to, the Security Documents and delivery of such other
security and other documents as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Liens created, or purported
or intended to be created, by the Security Documents.
(j) Conditions Relating to Mortgaged Real Property and Real
Property. On or prior to the Closing Date, each Borrower and each Subsidiary to
enter into a Mortgage shall have caused to be delivered to the Administrative
Agent, on behalf of the Lenders, the following documents and instruments:
(i) a Mortgage encumbering each Mortgaged Real Property in favor of
the Administrative Agent, for the benefit of the Lenders, in form for
recording in the recording office of each political subdivision or foreign
jurisdiction where each such Mortgaged Real Property is situated, together
with such certificates, affidavits, questionnaires or returns as shall be
required in connection with the recording or filing thereof to create a
lien under applicable law, and other similar statements as are
contemplated by the counsel opinions described in subsection 5.1(e) in
respect of such Mortgage, all of which shall be in form and substance
reasonably satisfactory to the Administrative Agent, and any other
instruments necessary to grant a mortgage lien under the laws of any
applicable jurisdiction, which Mortgage and financing statements and other
instruments shall be effective to create a first priority Lien on such
Mortgaged Real Property subject to no Liens other than Prior Liens
applicable to such Mortgaged Real Property and other than Permitted Liens;
(ii) with respect to each Mortgaged Real Property, such consents,
approvals, estoppels, tenant subordination agreements or other instruments
as necessary or required to consummate the transactions contemplated
hereby or as shall reasonably be deemed
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necessary by the Administrative Agent in order for the owner or holder of
the fee interest constituting such Mortgaged Real Property to grant the
Lien contemplated by the Mortgage with respect to such Mortgaged Real
Property; and
(iii) the following documents and instruments:
(1) with respect to each Mortgage, a policy (or commitment to issue
a policy) of title insurance insuring (or committing to insure) the Lien
of such Mortgage as a valid first priority Lien on the real property and
fixtures described therein in an amount not less than 115% of the fair
market value thereof as determined by the appraisal reports prepared
pursuant to subsection 5.1(p) which policy (or commitment) shall (a) be
issued by the Title Company, (b) include such reinsurance arrangements
(with provisions for direct access) as shall be reasonably acceptable to
the Administrative Agent, (c) contain a "tie-in" or "cluster" endorsement
(if available under applicable law) (i.e., policies which insure against
losses regardless of location or allocated value of the insured property
up to a stated maximum coverage amount), (d) have been supplemented by
such endorsements (or where such endorsements are not available, opinions
of special counsel or other professionals reasonably acceptable to the
Administrative Agent) as shall be reasonably requested by the
Administrative Agent, (e) such affidavits and instruments of
indemnification as shall be required to induce the Title Company to issue
the policy or policies (or commitment) and endorsements contemplated in
this subparagraph (iii) and (f) contain no exceptions to title other than
exceptions for the Prior Liens applicable to such Mortgaged Real Property;
(2) with respect to each Mortgaged Real Property, a Survey;
(3) with respect to each Mortgaged Real Property, policies or
certificates of insurance as required by the Mortgage relating thereto;
(4) with respect to each Real Property and each Mortgaged Real
Property, UCC, judgment and tax lien searches (or foreign jurisdictions
equivalent) confirming that the personal property comprising a part of
such Real Property or Mortgaged Real Property is subject to no Liens other
than Prior Liens;
(5) evidence acceptable to the Administrative Agent of payment by
the Borrowers of all title insurance premiums, search and examination
charges, survey costs and related charges, mortgage recording taxes and
related charges required for the recording of the Mortgages and issuance
of the title insurance policies referred to in subparagraph (iii) above;
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(6) with respect to each Real Property or Mortgaged Real Property,
copies of all Leases, subleases, leases in which a Loan Party holds the
tenant's interest or other agreements relating to possessory interests. To
the extent any of the foregoing affect any Mortgaged Real Property, such
agreement shall be subordinate to the Lien of the Mortgage to be recorded
against such Mortgaged Real Property, and shall otherwise be acceptable to
the Administrative Agent; and
(7) with respect to each Mortgaged Real Property, an Officers'
Certificate or other evidence satisfactory to the Administrative Agent
that as of the date thereof there (a) has been issued and is in effect a
valid and proper certificate of occupancy or local or foreign equivalent
for the use then being made of such Mortgaged Real Property and that there
is not outstanding any citation, violation or similar notice indicating
that such Mortgaged Real Property contains conditions which are not in
compliance with local or foreign codes or ordinances relating to building
or fire safety or structural soundness, (b) has not occurred any Taking or
Destruction of any Mortgaged Real Property and (c) are no disputes
regarding boundary lines, location, encroachment or possession of such
Mortgaged Real Property and no state of facts existing which could give
rise to any such claim.
(k) Solvency Opinion; Environmental Analyses; Evidence of Insurance;
Financial Statements. On the Closing Date, the Agents and the Lenders shall have
received:
(i) an opinion (and related going-concern valuation) satisfactory in
all respects to the Agents and the Lenders from Appraisal Economics or
other independent valuation firm reasonably satisfactory to the Agents and
the Lenders to the effect that after giving effect to the Transactions, US
Borrower, on a consolidated basis, is not and will not be insolvent, will
not be left with unreasonably small capital with which to engage in its
business and has not incurred and will not have incurred debts beyond its
ability to pay such debts as they mature;
(ii) Phase I environmental assessments or their substantial
equivalent from ICF Kaiser Engineers, Inc. ("ICF") with respect to
domestic properties on which manufacturing operations are currently
conducted by US Borrower or any Subsidiary (immediately after giving
effect to the Transactions), and written reports from ICF with respect to
(A) foreign properties on which manufacturing operations are currently
conducted by US Borrower or any Subsidiary (immediately after giving
effect to the Transactions), (B) former manufacturing facilities at
Landing, New Jersey and Albstadt, Giessen and Steinbach, Germany, (C)
certain non-manufacturing properties in Switzerland and (D) certain
representative domestic and foreign sales and service offices
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in each case the results of which shall be in form and substance
reasonably satisfactory to the Agents and the Required Lenders; and
(iii) evidence of insurance complying with the requirements of
Section 7.5 for the business and properties of US Borrower and the
Subsidiaries, in scope, form and substance satisfactory to the Agents and
the Required Lenders and naming the Administrative Agent as an additional
insured and/or loss payee.
(l) Pro Forma Balance Sheet. On or prior to the Closing Date, there
shall have been delivered to the Agents, an unaudited pro forma consolidated
balance sheet of US Borrower and the Subsidiaries as at June 30, 1996, after
giving effect to the Transactions and prepared in accordance with GAAP with U.S.
$ as the functional currency, together with a related funds flow statement,
which pro forma balance sheet and funds flow statement shall be satisfactory in
form and substance to the Agents and the Required Lenders.
(m) Payment of Fees. On the Closing Date, all costs, fees and
expenses, and all other compensation contemplated by this Agreement, due to the
Arranger, the Administrative Agent or the Lenders (including, without
limitation, Attorney Costs of the Agents) shall have been paid to the extent due
and if then invoiced.
(n) Other Matters. The Agents and the Lenders shall be reasonably
satisfied in all respects with (i) the status of all labor, employee benefit,
environmental and health and safety matters involving the Loan Parties, after
giving effect to the Transactions, and their plans with respect thereto; (ii)
the corporate and capital structure, and documents and instruments related
thereto, of the Loan Parties, after giving effect to the Transactions; (iii) the
amount, terms and conditions of any Indebtedness of any Loan Party to remain
outstanding after the Closing Date; (iv) the form and substance of all other
material documentation, including any tax sharing agreement, employment
agreement, management compensation arrangement (including any agreements entered
into with any of the senior management of the Borrowers) or other financing
arrangement of the Loan Parties; and (v) all legal, tax, accounting and currency
hedging matters relating to the transactions contemplated hereby, including,
without limitation, the ability of Subsidiaries of US Borrower to repatriate
funds to US Borrower and the withholding tax consequences thereof and the
Borrowers' plans and programs with respect to managing currency risk exposure.
(o) Certificate. A certificate signed by a Responsible Officer,
dated as of the Closing Date, stating that: (i) the representations and
warranties contained in Article VI are true and correct in all material respects
on and as of such date, as though made on and as of such date; (ii) no Event of
Default or Unmatured Event of Default exists or would result from the initial
Credit Extension; and (iii) no event or circumstance has occurred since December
31,
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1995 with respect to US Borrower or any of its Subsidiaries (after giving effect
to the Transactions) that has resulted in a Material Adverse Effect (except to
the extent that the incurrence of Indebtedness pursuant to this Agreement and
the Senior Subordinated Notes or the consummation of the M-T Acquisition would
be deemed such an event or condition).
(p) Debt to Be Repaid. All Debt to Be Repaid set forth on Schedule
5.1(p) shall have been repaid in a manner satisfactory to the Agents and the
Lenders.
5.2. Conditions to All Credit Extensions. The obligation of each
Lender to make any Credit Extension (including the initial Credit Extension) is
subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date or Issuance Date:
(a) Notice, Application. The Administrative Agent shall have
received a Notice of Committed Borrowing or the Administrative Agent and the
Applicable Swing Line Lender shall have received notice from either Borrower of
a Swing Line Loan or the L/C Lender and the Administrative Agent shall have
received an L/C Application or L/C Amendment Application, as required under
Section 3.2 (in the case of any Issuance of a Letter of Credit).
(b) Continuation of Representations and Warranties. The
representations and warranties in Article VI shall be true and correct in all
material respects on and as of the date of such Credit Extension with the same
effect as if made on and as of such date (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct as of such earlier date).
(c) No Existing Default; No Legal Bar. No Event of Default or
Unmatured Event of Default shall exist or will result from such Credit
Extension. No order, judgment or decree of any court, arbitration or
Governmental Authority shall purport to restrain any Lender from making any
Loans to be made by it on the date of such Credit Extension; and no injunction
or other restraining order shall have been issued and no hearing to cause an
injunction or other restraining order to be issued shall be pending or noticed
with respect to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as a
result of, the transactions contemplated by this Agreement or the making of
Loans hereunder.
Each Notice of Committed Borrowing, L/C Application, L/C Amendment
Application and Swing Loan request submitted by either Borrower hereunder shall
constitute a representation and warranty by the Borrowers hereunder, as of the
date of such notice or request and as of the relevant Borrowing Date or Issuance
Date, as applicable, that the applicable conditions in this Section 5.2 are
satisfied.
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5.3 Delivery of Documents. All of the certificates, legal opinions
and other documents and papers referred to in Sections 5.1 and 5.2, unless
otherwise specified, shall be delivered to each of the Agents at their
respective office (or such other location as may be specified by such Agent) for
the account of each of the Lenders and in sufficient counterparts for each
Lender and, except where specifically otherwise provided, shall be reasonably
satisfactory to the Agents and the Lenders; provided, however, that for any
Credit Extension other than the initial Credit Extension, Borrower shall not be
required to deliver surveys, leases, insurance certificates, opinions, title
insurance, UCC tax lien or judgment searches, or appraisals.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Each Borrower makes the following representations and warranties to
each Agent and each Lender, all of which shall survive the execution and
delivery of this Agreement and the making of the Loans (with the execution and
delivery of this Agreement and the making of each Loan thereafter being deemed
to constitute a representation and warranty that the matters specified in this
Article VI are true and correct in all material respects after giving effect to
the M-T Acquisition and the related transactions and as of the date of such Loan
unless such representation and warranty expressly indicates that it is being
made as of any specific date).
6.1. Corporate Status. Each Company (a) is a corporation,
partnership, joint stock company, limited liability company or other legal
entity duly organized, validly existing and, if applicable, in good standing
under the laws of its jurisdiction of organization; (b) has full corporate or
other power and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to own, lease or
otherwise hold its properties and assets and to carry on its business as
presently conducted; (c) in the case of the Domestic Loan Parties is duly
qualified and in good standing to do business as a foreign corporation in each
U.S. state in which the conduct or nature of its business or the ownership,
leasing or holding of its properties makes such qualification necessary; and (d)
is in compliance with all Requirements of Law, except, in each case referred to
in clauses (b), (c) and (d), to the extent that the failure to do so would not,
individually or in the aggregate, have a Material Adverse Effect.
6.2. Authority. Each Loan Party has all requisite corporate power
and authority to enter into each Basic Document to which it is a party and to
perform its obligations thereunder and to consummate the transactions
contemplated thereby. All corporate acts and other proceedings required to be
taken by each Company to authorize the execution, delivery
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and performance of each Basic Document to which such entity is a party and the
consummation of the transactions contemplated thereby have been duly and
properly taken.
6.3. No Conflicts; Consents. (a) The execution, delivery and
performance by each Company of each Basic Document to which such entity is a
party does not and will not conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or to
loss of a material benefit under, any provision of (i) the Organization
Documents of such Company; (ii) any note, bond, mortgage, indenture, deed of
trust, license, lease, contract, commitment, agreement or arrangement to which
such Company is a party or by which any of its properties or assets are bound;
or (iii) any judgment, order or decree, or statute, law, ordinance, rule or
regulation applicable to such Company or its properties or assets, other than,
in the case of clauses (ii) and (iii) above, any such items that would not,
individually or in the aggregate, have a Material Adverse Effect.
(b) No material consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any Governmental
Authority is required to be obtained or made by or with respect to any Company
in connection with the execution, delivery and performance of any Basic Document
or the consummation of the Transactions or the other transactions contemplated
hereby or thereby, other than filings required pursuant to Applicable Antitrust
Laws, approvals required pursuant to the Lex Friedrich Statute if applicable to
the transactions contemplated hereby, U.S. Federal, state and foreign securities
and Blue Sky laws in connection with the offering and sale of the Senior
Subordinated Notes and Equity Issuance, Chinese governmental consent to the
transfer of Changzhou joint venture and any other consents, approvals, licenses,
permits, orders or authorizations, or registrations, declarations or filings,
the failure of which to obtain would not, individually or in the aggregate, have
a Material Adverse Effect.
6.4. Binding Effect. Each Basic Document to which any Company is a
party constitutes the legal, valid and binding obligation of such Company,
enforceable against such Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability, or by other laws and regulations of
non-U.S. jurisdictions.
6.5. Litigation. Except as may exist with respect to matters
specifically disclosed in Schedule 6.5, there are no actions, suits,
proceedings, claims or disputes pending or, to the best knowledge of any Loan
Party, threatened or contemplated, at law, in equity, in arbitration or before
any Governmental Authority, against any Company or any of its properties which
(a) would have a Material Adverse Effect; or (b) would give rise to any legal
restraint on or
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prohibition against the Transactions or any of the transactions contemplated by
any Basic Document. No Company is a party or subject to or in default under any
material judgment, order, injunction or decree of any Governmental Authority or
arbitration tribunal applicable to it or any of its respective properties,
assets, operations or businesses, except where such events would not, singly or
in the aggregate, have a Material Adverse Effect. There is no pending
investigation of any Company, nor has there been any such investigation
threatened in writing in either case by any Governmental Authority, except where
such events could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
6.6. No Default. No Company is in default in the performance,
observance or fulfillment of any Contractual Obligation of such Company which
default would, singly or in the aggregate with any other default, have a
Material Adverse Effect, and no condition exists which, with the giving of
notice or the lapse of time or both, would, individually or in the aggregate
with any other condition, constitute such a default. No event has occurred and
no condition exists which, singly or in the aggregate with any other event or
condition, would constitute an Event of Default or an Unmatured Event of
Default. No Company is in violation of any term of its Organization Documents,
except where such violation would not, individually or in the aggregate, have a
Material Adverse Effect.
6.7. Benefit Plans. (a) Each Company and each of its ERISA
Affiliates are in compliance with all applicable provisions and requirements of
ERISA, the Code and other applicable laws with respect to each Plan, and have
performed all their material obligations under each Plan, except where
non-compliance or non-performance would not, individually or in the aggregate,
have a Material Adverse Effect. No ERISA Events have occurred or are reasonably
expected to occur which individually or in the aggregate resulted in or are
reasonably likely to result in (i) a Material Adverse Effect or (ii) the
imposition of a lien on the assets of any Company or any of its ERISA Affiliates
or a requirement for any Company or any of its ERISA Affiliates to post a bond
or other security. As of the most recent valuation date for any Pension Plan,
the amount of Unfunded Pension Liabilities individually or in the aggregate for
all Pension Plans (excluding for purposes of such computation any Pension Plans
which have a negative Amount of Unfunded Pension Liabilities) does not exceed
the amount set forth in the financial statements of the Mettler-Toledo Group as
of June 30, 1996 as set forth in the Form S-1 filed with the SEC in connection
with the Senior Subordinated Notes plus $1,000,000.
(b) Each Company and each of the Foreign Plans are in compliance
with all applicable laws and regulations with respect to the Foreign Plans and
the terms of the Foreign Plans, and all required contributions have been made to
the Foreign Plans, except where non-compliance or failure would not,
individually or in the aggregate, have a Material Adverse Effect. There are no
unfunded liabilities under any Foreign Plan except for those which would not
have a Material Adverse Effect. For purposes hereof, the term "Foreign Plans"
shall mean
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any employee benefit plan, program, policy, arrangement or agreement maintained
or contributed to by, or entered into with, a Company with respect to employees
employed outside the United States.
6.8. Use of Proceeds; Margin Regulations. The proceeds of the Loans
are to be used solely for the purposes set forth in and permitted by Section
7.11 and Section 8.7. No Loan Party is generally engaged in the business of
purchasing or selling Margin Stock or extending credit for the purpose of
purchasing or carrying Margin Stock.
6.9. Financial Condition; Financial Statements; etc. (a) The audited
combined balance sheet of the Mettler-Toledo Group dated December 31, 1995 (the
"Balance Sheet"), and the audited combined statements of operations and cash
flows of the Mettler-Toledo Group for the year ended December 31, 1995, together
with the notes to such financial statements, have been prepared in conformity
with United States generally accepted accounting principles consistently applied
(except in each case as described in the notes thereto) and on that basis fairly
present the combined financial condition and results of operations of the
Mettler-Toledo Group as of the respective dates thereof and for the respective
periods indicated.
(b) Since December 31, 1995, there has not occurred an event or
condition that has had or would have, individually or in the aggregate, a
Material Adverse Effect, except to the extent that the incurrence of
Indebtedness pursuant to this Agreement and the Senior Subordinated Notes or the
consummation of the M-T Acquisition would be deemed such an event or condition.
(c) On and as of the Closing Date and on and as of each Borrowing
Date, on a pro forma basis after giving effect to the Transactions (solely as to
the Closing Date) and to all Indebtedness incurred, and to be incurred, and
Liens created, and to be created, by each Loan Party on such date, (x) the sum
of the assets, at a fair valuation, of US Borrower and the Subsidiaries, on a
consolidated basis, will exceed such Persons' debts, on a consolidated basis,
(y) US Borrower and the Subsidiaries, on a consolidated basis, have not incurred
or intended to, or believe that they will, incur debts beyond their ability to
pay such debts as such debts mature and (z) US Borrower and the Subsidiaries, on
a consolidated basis, will have sufficient capital with which to conduct their
business. For purposes of this Section 6.9(c), "debt" means any liability on a
claim, and "claim" means (i) right to payment whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
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(d) Except as fully reflected in the financial statements delivered
at any time pursuant to Section 7.1 or any financial statements delivered in
connection with the consummation of the Transactions and except for the
Indebtedness incurred under this Agreement and the Senior Subordinated Notes,
there were as of the Closing Date and on and as of each Borrowing Date (and
after giving effect to any Loans made on such date), no liabilities or
obligations (excluding current obligations incurred in the ordinary course of
business) with respect to US Borrower or any Subsidiary of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due), and
the Borrowers do not know of any such liability or obligation which,
individually or in the aggregate, has had or would have a Material Adverse
Effect.
(e) During the period from December 31, 1995 to and including the
Closing Date, except as provided in the Transaction Documents, there has been no
sale, transfer or other disposition by the Mettler-Toledo Group of any material
part of the business or property of the Mettler-Toledo Group, taken as a whole,
and no purchase or other acquisition by any of them of any business or property
(including any capital stock of any other Person) material in relation to the
consolidated financial condition of the Mettler-Toledo Group, taken as a whole,
in each case, which is not reflected in the financial statements delivered to
the Agents and the Lenders or in the notes thereto or otherwise in writing to
the Agents and the Lenders on or prior to the Closing Date (including the
prospectus filed with the SEC for the offering and sale of the Senior
Subordinated Notes).
6.10. Properties. US Borrower and each Subsidiary owns or leases, as
applicable, all properties and assets reflected in the most recent financial
statements delivered pursuant to Section 7.1, except as sold or otherwise
disposed of since the date of such financial statements in the ordinary course
of business and in accordance with this Agreement and the MT Acquisition
Documents. Title to each such property or asset is held by US Borrower or a
Subsidiary free and clear of all Liens, except for Prior Liens and Permitted
Liens. US Borrower and the Subsidiaries hold all material licenses, certificates
of occupancy or operation and similar certificates and clearances of municipal
and other authorities necessary to own and operate their properties in the
manner and for the purposes currently operated by such parties the absence of
which would, individually or in the aggregate, have a Material Adverse Effect.
Neither US Borrower nor any Subsidiary has received written notice of defaults
of a material nature with respect to any leases of real property under which US
Borrower or any Subsidiary, is lessor or lessee that would, individually or in
the aggregate, have a Material Adverse Effect.
6.11. Taxes. US Borrower and each Subsidiary (and their
predecessors, if any, for whose tax liabilities such Person is or may be liable)
has filed all tax returns reports and forms required to be filed by it and has
paid all material taxes and assessments shown to be due thereon or for which a
notice of assessment or deficiency has been received, except for those
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contested in good faith and for which adequate reserves have been established in
accordance with GAAP, and except where failure would not, individually or in the
aggregate, have a Material Adverse Effect. US Borrower and any Subsidiary has
paid, or provided adequate reserves (established in accordance with GAAP) for
the payment of, all Federal, state, local and foreign income taxes (including
franchise taxes based upon income) applicable for all prior fiscal years and for
the current fiscal year to the date hereof, except where failure would not,
individually or in the aggregate, have a Material Adverse Effect. Neither
Borrower knows of any proposed tax assessment against US Borrower or any
Subsidiary that would, individually or in the aggregate, have a Material Adverse
Effect, other than any assessment which is being actively contested in good
faith by such Borrower or Subsidiary to the extent affected thereby and for
which reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
6.12. Environmental Matters. (A) Except as disclosed in Schedule
6.12 and except as would not, individually or in the aggregate, have a Material
Adverse Effect:
(i) US Borrower and each Subsidiary has obtained all permits,
licenses and other authorizations which are required under any
Environmental Law with respect to the operation of the businesses and
facilities and properties owned, leased or operated by any of them
including, without limitation, any joint ventures.
(ii) US Borrower and each Subsidiary is in compliance with all terms
and conditions of the permits, licenses and authorizations specified in
subsection (i) above, and is also in compliance with, and has no liability
under, any Environmental Laws applicable to it and its business and
operations and facilities and properties owned, leased or operated by any
of them.
(iii) Neither US Borrower nor any Subsidiary has received written
notice that it has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), or any comparable foreign or state
law, nor has US Borrower or any Subsidiary received any written
notification that any Hazardous Materials that it, or any of their
respective predecessors in interest has used, generated, stored, treated,
handled, transported or disposed of, or arranged for disposal or treatment
of, or arranged with a transporter for transport for disposal or treatment
of, have been found at any site at which any governmental agency or
private party is conducting or plans to conduct a remedial investigation
or other action pursuant to any Environmental Law.
(iv) There have been no releases (i.e., any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping,
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leaching, disposing or dumping) of Hazardous Materials by US Borrower or
any Subsidiary or their respective predecessors in interest on, at, upon,
into or from any facilities or properties owned, leased, or operated by
any of them. To the knowledge of Borrowers and each of their Subsidiaries,
after due inquiry there have been no such releases on, at, upon, under,
from or into any property in the vicinity of any Mortgaged Real Property
that, through soil, air, surface water or groundwater migration or
contamination, may have migrated to or under such properties.
(v) No properties now or formerly owned, leased or operated by US
Borrower or any Subsidiary or any of their respective predecessors in
interest are (i) listed or proposed for listing on the National Priorities
List under CERCLA or (ii) listed in the Comprehensive Environmental
Response, Compensation, Liability Information System List promulgated
pursuant to CERCLA or (iii) [to the knowledge of Borrowers and each of
their Subsidiaries, after due inquiry,] included on any comparable lists
maintained by any Governmental Authority.
(vi) To the knowledge of Borrowers and each of their Subsidiaries,
after due inquiry, there are no past or present events, conditions,
activities, practices, or actions which would reasonably be expected to
prevent US Borrower's and its Subsidiaries' compliance with any
Environmental Law, or which would reasonably be expected to give rise to
any liability under any Environmental Law, including, without limitation,
liability under CERCLA or similar state, local or foreign laws.
(vii) No Lien has been asserted or recorded, or to the knowledge of
the Loan Parties and each of their Subsidiaries threatened, under any
Environmental Law with respect to any assets, facility, inventory or
property owned, leased or operated by US Borrower or any Subsidiary.
(viii) Neither US Borrower nor any Subsidiary has assumed by
contract any liabilities or obligations arising under any Environmental
Law in connection with (i) any properties or facilities formerly owned,
leased, operated or used by US Borrower or any Subsidiary (or any of their
respective predecessors in interest) or (ii) any divisions, subsidiaries,
companies or other entities formerly owned by US Borrower or any
Subsidiary.
(ix) Neither US Borrower nor any Subsidiary has entered into or
agreed to any currently pending or effective judgment, decree or order by
any judicial or administrative tribunal and are not subject to any
judgment, decree or order relating to compliance with any Environmental
Law or to investigation, response or corrective action with respect to any
Hazardous Material under any Environmental Law.
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(x) Neither US Borrower nor any Subsidiary has received any written
notice of an Environmental Claim with regard to any properties, facilities
or business operated or formerly operated by US Borrower or any Subsidiary
or any of their respective predecessors in interest.
(xi) To the knowledge of Borrowers and each of their Subsidiaries,
there are no underground storage tanks or related piping at any property
owned, operated or leased by US Borrower or any Subsidiary, and any former
underground tanks or related piping on any such property have been removed
or closed in accordance with any applicable Environmental Law.
(B) Environmental Investigations. All material environmental
investigations, studies, audits or assessments conducted of which US Borrower or
any Subsidiary has knowledge, after due inquiry, and is in the possession or
control of any of them in relation to the current or prior business, facilities
or properties of US Borrower or any Subsidiary (or any of their respective
predecessors in interest) or any property, asset or facility now or previously
owned, operated, leased or used by US Borrower or any Subsidiary (or any of
their respective predecessors in interest) have been made available to the
Administrative Agent.
6.13. Regulated Entities. No Loan Party is an "Investment Company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940. Neither of the Borrowers nor any other Loan
Party is subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal or state statute or regulation limiting its
ability to incur Indebtedness.
6.14. Employee and Labor Matters. There is (i) no unfair labor
practice complaint pending against US Borrower or any Subsidiary or, to the best
knowledge of the Borrowers, threatened against any of them, before the National
Labor Relations Board, and no grievance or arbitration proceeding arising out of
or under any collective bargaining agreement is so pending against US Borrower
or any Subsidiary or, to the best knowledge of the Borrowers, threatened against
any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against
US Borrower or any Subsidiary or, to the best knowledge of the Borrowers,
threatened against US Borrower or any Subsidiary and (iii) to the best knowledge
of the Borrowers, no union representation question existing with respect to the
employees of US Borrower or any Subsidiary and, to the best knowledge of the
Borrowers, no union organizing activities are taking place, except (with respect
to any matter specified in clause (i), (ii) or (iii) above, either individually
or in the aggregate) such as would not have a Material Adverse Effect.
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6.15. Intellectual Property. To the knowledge of the Borrowers, US
Borrower and each Subsidiary owns or possesses adequate licenses or otherwise
has the right to use all of the patents, patent applications, trademarks,
trademark applications, service marks, service mark applications, trade names,
copyrights, trade secrets and know-how (whether domestic or foreign)
(collectively, "Intellectual Property") that are necessary for the operation of
its business as presently conducted, except where the failure to so own or
possess licenses or rights would not, individually or in the aggregate, have a
Material Adverse Effect. To the knowledge of US Borrower and the Subsidiaries,
no claim is pending that US Borrower or any Subsidiary infringe upon the
asserted rights of any other Person under any Intellectual Property, except for
any such claim which would not, individually or in the aggregate, have a
Material Adverse Effect. To the knowledge of the Borrowers, no claim is pending
that any such Intellectual Property owned or licensed by US Borrower or any
Subsidiary or which US Borrower or any Subsidiary otherwise have the right to
use, is invalid or unenforceable, except for any such claim which would not,
individually or in the aggregate, have a Material Adverse Effect.
Except as set forth in Schedule 6.15, US Borrower or a Subsidiary
owns or has the right to use all Intellectual Property listed in Schedule 6.15
and the consummation of the transactions contemplated hereby will not, alter or
impair any such rights in a way that would, individually or in the aggregate,
have a Material Adverse Effect. Subject to the rights of third parties set forth
in Schedule 6.15, all Intellectual Property listed in Schedule 6.15 is free and
clear of all Liens except such as would not, individually or in the aggregate,
have a Material Adverse Effect.
6.16. Subsidiaries. As of the Closing Date, US Borrower has no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
6.16 hereto and has no equity investments in any other corporation or entity
other than those specifically disclosed in part (b) of Schedule 6.16.
6.17. Existing Indebtedness. Schedule 6.17 sets forth a true and
complete list of all Indebtedness of US Borrower and the Subsidiaries as of the
Closing Date and which is to remain outstanding after giving effect to the
Transactions and the incurrence of Loans on such date (excluding the Loans, the
Letters of Credit and the Senior Subordinated Notes, the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof and
the name of the respective borrower and any other entity which directly or
indirectly guaranteed such debt.
6.18. True and Complete Disclosure. All factual information (taken
as a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrowers and the other Loan Parties in writing to any Lender (including,
without limitation, all information contained in the M-T Acquisition Documents,
the Basic Documents and the Confidential Memorandum) for
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purposes of or in connection with this Agreement or any transaction contemplated
herein is (or was, on the date of making the Initial Loans), and all other such
factual information (taken as a whole) hereafter furnished by or on behalf of
the Borrowers in writing to any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information, taken as a whole, not misleading at such time in light of the
circumstances under which such information was provided. The projections and pro
forma financial information contained in or to be contained in such materials
(including the pro forma balance sheet furnished pursuant to Section 5.1(l), the
projections included in the Confidential Memorandum, and the budgets to be
furnished pursuant to Section 7.1(d)) are based on good faith estimates and
assumptions believed by the Borrowers to be reasonable at the time made, it
being recognized by the Lenders that such projections as to future events are
not to be viewed as facts, that actual results during the period or periods
covered by any such projections may differ materially from the projected results
and that the Borrowers make no representation or warranty that such projections,
pro forma results or budgets will be realized. There is no fact known to either
Borrower which materially and adversely affects the business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of US Borrower and the Subsidiaries, taken as a whole,
which has not been disclosed herein or in such other documents, certificates and
written statements furnished to the Lenders for use in connection with the
transactions contemplated hereby.
6.19. Security Interests. The Security Documents, once executed,
delivered, filed and/or recorded will create, in favor of the Administrative
Agent for the benefit of the Lenders, as security for the obligations purported
to be secured thereby, a valid and enforceable perfected first priority security
interest in and Lien upon all of the Collateral, superior to and prior to the
rights of all third persons and subject to no Liens except the Prior Liens
applicable to such Collateral and Permitted Liens. The mortgagor under each
Mortgage has good and marketable title to the Mortgaged Real Property free and
clear of all Liens other than Permitted Liens and Prior Liens applicable to such
Mortgaged Real Property. The respective pledgor or assignor, as the case may be,
has (or on and after the time it executes the respective Security Document, will
have) good and marketable title to all items of Collateral (other than real
property subject to a Mortgage) covered by such Security Document free and clear
of all Liens other than Liens permitted by the applicable Security Document. No
filings or recordings are required in order to perfect the security interests
created under any Security Document, (i) with respect to any Security Document
delivered on the Closing Date, except for filings or recordings required in
connection with any such Security Document as set forth in the opinions of
counsel delivered on the Closing Date which shall have been made on or prior to
the Closing Date or (ii) with respect to the Security Documents delivered
pursuant to Section 7.14, 7.15 or 7.22, except for the filings or recordings
which shall have been made on or prior to the execution and delivery of such
Security Documents.
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6.20. Representations and Warranties in Basic Documents. All
representations and warranties set forth in the other Basic Documents were (with
respect to representations and warranties of parties other than the Loan
Parties, to the knowledge of the Borrowers) true and correct in all material
respects as of the time such representations and warranties were made and shall
be true and correct in all material respects as of the Closing Date as if such
representations and warranties were made on and as of such date, unless stated
to relate to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date.
6.21. M-T Acquisition. At the time of consummation thereof, the M-T
Acquisition shall have been consummated substantially in accordance with the
terms of the M-T Acquisition Documents and all applicable Requirements of Law.
At the time of consummation thereof, all consents and approvals of, and filings
and registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required to make or consummate the
M-T Acquisition have been obtained, given, filed or taken or waived and are or
will be in full force and effect (or effective judicial relief with respect
thereto has been obtained), except as set forth on Schedule 6.21 and except
where the failure to obtain, give, file, or take would not have a Material
Adverse Effect. All applicable waiting periods with respect thereto have or,
prior to the time when required, will have, expired without, in all such cases,
any action being taken by any competent Governmental Authority which restrains,
prevents, or imposes material adverse conditions upon the M-T Acquisition.
Additionally, there does not exist any judgment, order or injunction prohibiting
or imposing material adverse conditions upon the M-T Acquisition or the
performance by US Borrower and the Subsidiaries of their obligations under the
M-T Acquisition Documents and all applicable Requirements of Law.
6.22. Broker's Fees. Except as disclosed in Schedule 6.22, no
broker's or finder's fee or commission will be payable with respect to this
Agreement or any of the Transactions contemplated hereby, and the Borrowers
hereby jointly and severally indemnify the Agents and the Lenders against, and
agree that they will jointly and severally hold the Agents and the Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including fees, expenses and disbursements or counsel) arising in
connection with any such claim, demand or liability.
6.23. Senior Subordinated Notes. The subordination provisions
contained in the Senior Subordinated Note Documents are enforceable against US
Borrower and each of its Subsidiaries party thereto, and all Obligations are
within the definition of "Senior Indebtedness" or "Guarantor Senior
Indebtedness", as the case may be, included in such subordination provisions.
Senior Subordinated Notes, when issued and sold, will either (a) have been
registered or qualified under applicable federal and state securities laws or
(b) be exempt
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therefrom. The offering documents for the issuance and sale of the Senior
Subordinated Notes, as of their date, did not contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statement therein not misleading.
ARTICLE VII.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any
Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding:
7.1. Financial Statements, etc. The Borrowers shall deliver to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders, with sufficient copies for each
Lender:
(a) as soon as available, but not later than 90 days after the end
of each fiscal year, a copy of the audited consolidated (and consolidating
with respect to CH Borrower on a consolidated basis with its Subsidiaries)
balance sheet of US Borrower and the Subsidiaries as at the end of such
year and the related consolidated (and consolidating with respect to CH
Borrower on a consolidated basis with its Subsidiaries) statements of
operations, retained earnings, shareholders' equity and cash flow for such
year, setting forth in each case in comparative form the corresponding
consolidated figures for the previous fiscal year and comparable budgeted
figures for such fiscal year, and, in the case of the consolidated
statements, accompanied by the opinion of KPMG Fides Peat or another
nationally recognized independent certified public accounting firm
selected by the Borrowers and reasonably acceptable to the Administrative
Agent ("Independent Auditor"), which opinion (i) shall state that such
consolidated financial statements present fairly the consolidated
financial position and results of operations of US Borrower and the
Subsidiaries for the periods indicated in conformity with GAAP and (ii)
shall not be qualified or limited because of a restricted or limited
examination by the Independent Auditor of any material portion of US
Borrower's or any Subsidiary's records and shall be delivered to the
Administrative Agent pursuant to a reliance agreement between the
Administrative Agent and Lenders and such Independent Auditor in form and
substance satisfactory to the Agents and a certificate of such accountants
stating that in the course of its regular audit of the business of US
Borrower and the Subsidiaries no Event of Default or Unmatured Event of
Default which has occurred and is continuing has come to their attention
or, if such an Event of Default or Unmatured Event of Default has come to
their attention, a statement as to the nature thereof;
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(b) as soon as available, but not later than 45 days after the end
of each of the fiscal quarters of each fiscal year, a copy of the
consolidated (and consolidating with respect to CH Borrower on a
consolidated basis with its Subsidiaries) balance sheet of US Borrower and
the Subsidiaries as of the end of such quarter and the related
consolidated (and consolidating with respect to CH Borrower) statements of
operations, retained earnings and cash flow for the period commencing on
the first day and ending on the last day of such quarter, and (except with
respect to the fourth fiscal quarter) the period from the beginning of the
respective fiscal year to the end of such quarter, setting forth in each
case in comparative form the corresponding consolidated figures for the
corresponding period in the previous fiscal year, accompanied by a
certificate of a Responsible Officer, which certificate shall state that
said consolidated financial statements fairly present, in accordance with
GAAP (subject to ordinary, good-faith year-end adjustments), the
consolidated financial position and the results of operations of US
Borrower and the Subsidiaries;
(c) within 60 days after the commencement of each fiscal year,
budgets of US Borrower and the Subsidiaries in reasonable detail for each
fiscal quarter of such fiscal year and for each fiscal quarter of the
immediately succeeding fiscal year, in each case, as customarily prepared
by management for its internal use, setting forth, with appropriate
discussion, the principal assumptions upon which such budgets are based.
Together with each delivery of statements of operations pursuant to
subsection 7.1(c), a comparison of the current year-to-date financial
results against the budgets required to be submitted pursuant to this
subsection (c) shall be presented; and
(d) promptly upon receipt thereof, a copy of each report or
"management letter" submitted to US Borrower or any Subsidiary by its
independent accountants in connection with any annual, interim or special
audit made by them of the books of US Borrower or any Subsidiary.
7.2. Certificates; Other Information. The Borrowers shall furnish to
the Administrative Agent and each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a Compliance Certificate
executed by a Responsible Officer stating that the Loan Parties are in
compliance with the covenants set forth under this Article VII and Article
VIII;
(b) on and after the Reset Date, together with the financial
statements delivered pursuant to subsections 7.1(a) and 7.1(b), an
Interest Rate Certificate;
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(c) copies of all financial statements and regular, periodical or
special reports that US Borrower or any Subsidiary may make to, or file
with, the SEC if not otherwise delivered under Section 7.1; and
(d) as soon as practicable, such additional information regarding
the business, financial or corporate affairs of US Borrower or any
Subsidiary as the Administrative Agent or any Lender (through the
Administrative Agent) may from time to time reasonably (as to type and
interval) request.
7.3. Notices. Promptly upon a Responsible Officer learning thereof,
the Borrowers shall notify the Administrative Agent and each Lender:
(a) of the occurrence of any Event of Default or Unmatured Event of
Default;
(b) of any of the following matters that has resulted in a Material
Adverse Effect: (i) any breach or non-performance of, or any default
under, a Contractual Obligation of US Borrower or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension by or before
any Governmental Authority affecting US Borrower or any Subsidiary; or
(iii) to the knowledge of the Borrowers the commencement of, or any
material development in, any litigation or proceeding affecting US
Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws;
(c) of the occurrence of any of the following events if such event
has resulted or could reasonably be expected to result in any Material
Adverse Effect or in a Lien under ERISA or the Code (but in no event more
than ten days after such event), and deliver to the Administrative Agent
and each Lender a copy of any notice with respect to such event that is
filed with a Governmental Authority and any notice delivered by a
Governmental Authority to the Loan Party or any ERISA Affiliate with
respect to such event, and upon the request of the Administrative Agent or
any Lender shall furnish any Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) filed by any Loan Party or ERISA
Affiliate with the Internal Revenue Service with respect to any Pension
Plan: (i) an ERISA Event; (ii) the adoption after the date hereof of, or
the commencement after the date hereof of contributions to, any Plan
subject to Section 412 of the Code by US Borrower or any ERISA Affiliate;
or (iii) the adoption after the date hereof of any amendment to a Plan
subject to Section 412 of the Code;
(d)(i) of any pending or threatened Environmental Claim against US
Borrower or any Subsidiary or any Real Property owned or operated by US
Borrower or any Subsidiary that would reasonably be expected, singly or in
the aggregate, to have a
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Material Adverse Effect; (ii) of any condition or occurrence on any Real
Property owned or operated by US Borrower or any Subsidiary that (x)
results in noncompliance by US Borrower or any Subsidiary with any
applicable Environmental Law or (y) could reasonably be expected to form
the basis of an Environmental Claim against US Borrower or any Subsidiary
or any such Real Property in each case to the extent that any such
noncompliance or Environmental Claim would, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and (iii) of any
condition or occurrence on any Real Property owned or operated by US
Borrower or any Subsidiary that could reasonably be anticipated to cause
such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability by US Borrower or any Subsidiary, as the
case may be, of its interest in such Real Property under any Environmental
Law which condition or occurrence would, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and
(e) of the occurrence of any default or event of default under the
Senior Subordinated Notes.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Borrowers or any affected
Subsidiary proposes to take with respect thereto.
7.4. Preservation of Corporate Existence, etc. The Borrowers shall,
and shall cause each of their respective Subsidiaries to: (a) preserve and
maintain in full force and effect its existence and good standing under the laws
of its state or jurisdiction of organization, except in a transaction permitted
by Section 8.3; (b) preserve and maintain in full force and effect all material
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary in the normal conduct of its business, except in connection
with transactions permitted by Section 8.3 and sales of assets permitted by
Section 8.2; (c) use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; (d) preserve or renew all of
its Intellectual Property, the non-preservation of which would, singly or in the
aggregate, have a Material Adverse Effect; and (e) comply in all material
respects with all material Requirements of Law of any Governmental Authority
having jurisdiction over it or its business if failure to comply with such
requirements would, singly or in the aggregate, have a Material Adverse Effect,
except, in the case of clauses (a) (with respect to any Subsidiary which is of
de minimus significance to US Borrower and the Subsidiaries taken as a whole),
(b), (c) and (d), to the extent no longer economically desirable, in the
commercially reasonable opinion of management and except for the M-T
Acquisition.
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7.5. Maintenance of Property; Insurance. (a) Each Borrower will, and
will cause each of its Subsidiaries to exercise commercially reasonable efforts
to maintain or cause to be maintained in good repair, working order and
condition (subject to normal wear and tear) all properties used in its
businesses and from time to time will make or cause to be made all repairs,
renewals and replacements thereof, which the applicable Borrower or the
applicable Subsidiary deems appropriate in its commercially reasonable opinion
so that the business carried on in connection therewith may be properly and
advantageously conducted and will maintain and renew as necessary all licenses,
permits and other clearances reasonably necessary in the applicable Borrower's
or the applicable Subsidiary's commercially reasonable opinion to use and occupy
such properties, except to the extent no longer economically desirable in the
commercially reasonable opinion of the applicable Borrower or the applicable
Subsidiary.
(b) The Borrowers shall, and shall cause each of their respective
Subsidiaries to, maintain in full force and effect, with financially sound and
reputable independent insurers, insurance or reinsurance with respect to their
properties and business against loss or damage of the kinds customarily insured
against by corporations of established reputation engaged in the same or similar
business and similarly situated, of such types and in such amounts as are
customarily carried under similar circumstances by such other corporations. The
Borrowers and each of their respective Subsidiaries, as applicable, shall
furnish to the Administrative Agent on the Closing Date a summary of the
insurance carried in respect of US Borrower and the Subsidiaries and the assets
of US Borrower and the Subsidiaries, together with certificates of insurance and
other evidence of such insurance, if any, naming the Administrative Agent as an
additional insured and/or loss payee.
(c) Without duplicating the requirements of subsection 7.5(b) above,
each Borrower will, and will cause each of its Subsidiaries to, maintain in full
force the insurance coverages specified in the Mortgages and the other Security
Documents.
7.6. Payment of Obligations. The Borrowers shall, and shall cause
each of their respective Subsidiaries to, pay and discharge as the same shall
become due and payable all of their obligations and liabilities, including: (a)
all material tax liabilities, assessments and governmental charges or levies
upon them or their properties or assets; and (b) all lawful claims which, if
unpaid, would by law become a Lien (other than a Permitted Lien) upon their
property; unless, in each case, the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by such Borrower or such Subsidiary with respect thereto, or the
failure to so pay or discharge would not, individually or in the aggregate, have
a Material Adverse Effect.
7.7. Compliance with Environmental Laws. (a) Each Borrower shall
comply and if any of its Subsidiaries fails to comply, shall cause such
Subsidiary to comply with all
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Environmental Laws; (b) each Borrower will pay, and, if any of its Subsidiaries
fails to pay, will cause each such Subsidiary to pay, all costs and expenses
incurred by it in complying in all material respects with all Environmental
Laws, and will keep or cause to be kept all Real Property owned, operated or
leased by any of them free and clear of any Liens imposed pursuant to such
Environmental Laws unless the failure to comply with these requirements
specified in clause (a) or (b) above would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; (c) in the
event of the presence of any Hazardous Material at, on, under or upon any
property owned, operated or leased by either Borrower or any Subsidiary which
could reasonably be expected to result in liability under or a violation of any
Environmental Law, in each case which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, the Borrowers agree to
undertake, and/or to cause any of their respective Subsidiaries, tenants or
occupants to undertake, at their sole expense, any investigation, removal,
remedial or other action required pursuant to Environmental Laws to mitigate and
eliminate any such adverse effect; provided, however, that neither Borrower nor
any of their respective Subsidiaries shall be required to comply with any order
or directive which is being contested in good faith and by proper proceedings so
long as it has maintained adequate reserves with respect to such compliance to
the extent required in accordance with GAAP; and (d) each Borrower shall as
promptly as practicable notify the Administrative Agent of the occurrence of any
event specified in clause (c) of this Section 7.7 and shall thereafter keep the
Administrative Agent informed on a periodic basis of any actions taken in
response to such event and the results of such actions.
7.8. Compliance with ERISA. The Borrowers shall, and shall cause
each of their respective ERISA Affiliates to: (a) maintain each Plan in
compliance in all material respects with the applicable provisions of ERISA, the
Code and other applicable law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; and (c) make all
required contributions to any Plan subject to Section 412 of the Code, except
where failure would not, individually or in the aggregate, have a Material
Adverse Effect.
7.9. Inspection of Property and Books and Records. The Borrowers
shall, and shall cause each of their respective Subsidiaries to, maintain proper
books of record and account, in which full, true and correct entries in order to
permit the preparation of US Borrower's consolidated financial statements in
conformity with GAAP shall be made of all financial transactions and matters
involving the assets and business of US Borrower and the Subsidiaries. The
Borrowers shall, and shall cause each of their respective Subsidiaries to,
permit representatives and independent contractors of the Administrative Agent
or any Lender to visit and inspect any of their respective properties or assets,
to examine their respective corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective directors, officers, and independent
public accountants (provided that officers of a Borrower or such Subsidiary are
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offered the reasonable opportunity to be present at such discussion), all at the
expense of the Borrowers (it being understood that travel and out-of-pocket
expenses of the Agents and the Lenders in connection therewith shall not be for
the account of the Borrowers) and at such reasonable times and intervals during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrowers or to the applicable Subsidiary and in
connection with commercially reasonable informational needs of the
Administrative Agent or any Lender; provided, however, when an Event of Default
or emergency exists the Administrative Agent or any Lender may do any of the
foregoing at any time and without advance notice in a commercially reasonable
manner.
7.10. End of Fiscal Years; Fiscal Quarters. US Borrower will, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on December 31 of each year and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31 of each year.
7.11. Use of Proceeds. On the Closing Date, the Borrowers shall use
the proceeds of all of the Term Loans and a borrowing of not more than U.S. $75
million of the Revolving Facility Loans solely to (i) finance a portion of the
M-T Acquisition and (ii) pay fees and expenses in connection with the M-T
Acquisition transactions. After the Closing Date, the Revolving Facility will be
used solely to provide working capital and for general corporate purposes of the
Borrowers and their Subsidiaries and to make the Ciba Loan.
7.12. Further Assurances. The Borrowers shall take such actions as
are reasonably necessary, or as the Administrative Agent or any Lender may
reasonably request from time to time, to ensure that the Obligations of the
Borrowers are unconditionally guaranteed by each of the Domestic Subsidiaries
and the Obligations of CH Borrower are unconditionally guaranteed (subject to
limitations under applicable law) by each of the CH Foreign Subsidiaries (other
than, subject to Section 7.22, the Specified Subsidiaries) and cause any future
Subsidiaries created or acquired by either of the Borrowers to execute a
Domestic Subsidiary Guarantee, in the case of any Domestic Subsidiary, or
Foreign Subsidiary Guarantee (subject to limitations under applicable law
(including limitations as to the nature of the Obligations which may be
guaranteed)), in the case of any CH Foreign Subsidiaries (other than any CH
Foreign Subsidiary that cannot, by virtue of applicable law, enter into a
Foreign Subsidiary Guarantee), and (other than, subject to Section 7.22, any
Specified Subsidiary or any Subsidiary that cannot, by virtue of applicable law,
enter into security documents in respect of the Obligations) enter into any
other security documents that the Administrative Agent may reasonably require
and are secured by perfected Liens in favor of the Administrative Agent, for the
benefit of the Administrative Agent and the applicable Lenders, on all of the
Collateral (subject to limitations under applicable law).
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7.13. Equal Security for Loans and Notes; No Further Negative
Pledges. (a) If either Borrower or any of their respective Subsidiaries shall
create or assume any Lien upon any of their respective property or assets,
whether now owned or hereafter acquired and whether or not such property or
assets constitute Collateral, other than any Lien permitted by the Loan
Documents, it shall make or cause to be made effective provisions whereby the
Obligations will be secured by such Lien equally and ratably with any and all
other Indebtedness thereby secured as long as any such Indebtedness shall be
secured; provided, however, that this covenant shall not be construed as consent
by the Administrative Agent and the Required Lenders to any violation by either
Borrower or any of their respective Subsidiaries of the provisions of Section
8.1.
(b) Except with respect to prohibitions against other encumbrances
on specific property encumbered to secure payment of particular Indebtedness
permitted hereunder (which Indebtedness relates solely to the acquisition or
improvement of such specific property), neither Borrower nor any of their
respective Subsidiaries shall enter into any agreement prohibiting the creation
or assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired.
7.14. Pledge of Additional Collateral. Subject to Section 7.13, as
soon as reasonably practicable after the acquisition of any property or assets
with a Dollar Equivalent Value of in excess of U.S. $100,000 individually and
$5.0 million or more in the aggregate of the type that would have constituted
Collateral (if the Person acquiring such assets had executed an appropriate
Security Document on the Closing Date (whether or not actually so executed)) at
the Closing Date (the "Additional Collateral"), the Borrowers will, and will
cause each of their respective Subsidiaries to, take all reasonably necessary or
desirable action, including the filing of appropriate financing statements under
the provisions of the UCC and applicable foreign, domestic or local laws, rules
or regulations in each of the offices where such filing is necessary or
appropriate, to grant to the Administrative Agent for the benefit of, with
respect to US Borrower or any Domestic Subsidiary, all of the Lenders and, with
respect to CH Borrower and CH Foreign Subsidiaries, the Lenders owed Obligations
by CH Borrower and/or CH Foreign Subsidiaries, a perfected first priority Lien
in such Collateral (or comparable interest under foreign law in the case of
foreign Collateral) pursuant to and to the full extent required by the
applicable Security Documents and this Agreement; provided, however, that
notwithstanding the foregoing, (i) none of US Borrower or any Domestic
Subsidiary shall be required, subject to Section 7.18, to pledge more than 65%
of the capital stock of any Foreign Subsidiary, (ii) none of US Borrower or any
Subsidiary shall be required, subject to Section 7.18, to pledge any property or
assets which in accordance with the terms of the Loan Documents was not pledged
(or would not have so pledged if then in existence) on the Closing Date and
(iii) no Foreign Subsidiary need pledge any property or assets to the extent
prohibited by applicable law. In the event that (x) US Borrower or any Domestic
Subsidiary acquires an
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interest in any additional real property which is a manufacturing or significant
assembly facility or of a character and importance similar at such time to the
facilities that are subject to the Mortgages on the Closing Date, US Borrower or
such Subsidiary, as the case may be, will take such reasonable actions and
execute such documents as the Administrative Agent shall reasonably require to
confirm the Lien of a Mortgage, if applicable, or to create a new Mortgage for
the benefit of the Lenders or (y) CH Borrower or any CH Foreign Subsidiary
acquires an interest in any additional real property which is a manufacturing or
significant assembly facility or of a character and importance similar at such
time to the facilities that are subject to the Mortgages on the Closing Date, CH
Borrower or such Subsidiary, as the case may be, will take such reasonable
actions and execute such documents as the Administrative Agent will reasonably
require to confirm the lien of a Mortgage, if applicable, or to create a new
Mortgage for the benefit of the Lenders which are owed Obligations by CH
Borrower or any CH Foreign Subsidiary. All actions taken by the parties in
connection with the pledge of Additional Collateral, including, without
limitation, reasonable costs of counsel for the Lenders, shall be for the
account of the Borrowers, which shall pay all reasonable sums due on demand.
7.15. Security Interests. (a) The Borrowers will, and will cause
each of their respective Subsidiaries to, perform any and all reasonable acts
and execute any and all documents (including, without limitation, the execution,
amendment or supplementation of any financing statement, continuation statement
or other statement) for filing in any appropriate jurisdiction under the
provisions of the UCC and applicable foreign, domestic or local law or any
statute, rule or regulation of any applicable jurisdiction, including any
filings in local real estate land record offices and the United States Patent
and Trademark Office, or the United States Copyright Office, which are
reasonably necessary or advisable, from time to time, in order to grant,
continue or maintain in favor of the Administrative Agent for the benefit of the
applicable Lenders a valid and perfected Lien on the Collateral and any
Additional Collateral, subject to no Liens except for Prior Liens, Permitted
Liens and Liens permitted by the applicable Security Documents.
(b) The Borrowers shall, and shall cause each of their respective
Subsidiaries to, deliver or cause to be delivered to the Administrative Agent
from time to time such other reasonable documentation, consents, authorizations,
approvals and orders in form and substance reasonably satisfactory to the
Administrative Agent as the Administrative Agent shall deem reasonably necessary
or advisable to perfect or maintain the Liens on the Collateral. Furthermore,
the Borrowers shall cause to be delivered to the Administrative Agent such
opinions of counsel, title insurance and other related documents as may
reasonably be requested by the Administrative Agent to assure itself that this
Section 7.15 has been complied with.
(c) If the Administrative Agent or the Required Lenders determine
that they are required by law or regulation to have appraisals prepared in
respect of the Real Property of
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the Borrowers and their respective Subsidiaries constituting Collateral, the
Borrowers shall provide to the Administrative Agent appraisals which satisfy the
applicable requirements of the Real Estate Appraisal Reform Amendments of FIRREA
and which shall be in form and substance satisfactory to the Administrative
Agent.
7.16. Interest Rate Protection. The Borrowers shall obtain, on or
within 90 days after the Closing Date, interest rate protection having terms and
with counterparties reasonably satisfactory to the Administrative Agent as shall
result in effectively limiting the interest cost to the Borrowers of 50% of the
aggregate Dollar Equivalent principal amount of then outstanding Term Loans for
a period of at least three years from the date the initial interest rate
protection was obtained.
7.17. Currency and Commodity Hedging Transactions. The Borrowers and
each of the Subsidiaries shall only enter into, purchase or otherwise acquire
agreements or arrangements relating to currency or commodity hedging to the
extent and only to the extent that such agreements or arrangements are entered
into, purchased or otherwise acquired in the ordinary course of business of the
Borrowers or any of the Subsidiaries with reputable financial institutions and
not for purposes of speculation.
7.18. Foreign Subsidiaries Security. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrowers reasonably acceptable to the Administrative Agent does not within 30
days after a request from the Administrative Agent or the Required Lenders
deliver its opinion with respect to any Foreign Subsidiary which has not already
had all of its stock owned by Holding or any of its Subsidiaries pledged
pursuant to a Securities Pledge Agreement, that (i) a pledge to secure the
Obligations of US Borrower or the Domestic Subsidiary Guarantor which is the
parent of such Foreign Subsidiary, as the case may be, (x) of 66-2/3% or more of
the total combined voting power of all classes of capital stock of such Foreign
Subsidiary entitled to vote and (y) of any promissory note issued by such
Foreign Subsidiary to US Borrower or any of its Domestic Subsidiaries, (ii) the
entering into by such Foreign Subsidiary of a security agreement in
substantially the form of the Security Agreement executed and delivered by the
Domestic Subsidiary Guarantors (with appropriate modifications to conform to
applicable law) and (iii) the entering into by such Foreign Subsidiary of a
guaranty in substantially the form of the Domestic Subsidiary Guarantee
guaranteeing the Obligations of US Borrower and CH Borrower, in any such case
could reasonably be expected to cause (I) the undistributed earnings of such
Foreign Subsidiary as determined for Federal income tax purposes to be treated
as a deemed dividend to such Foreign Subsidiary's United States parent for
Federal income tax purposes or (II) any other material adverse Federal income
tax consequences to the Loan Parties, then in the case of a failure to deliver
the opinion with respect to the factors described in clause (i) above, that
portion of such Foreign Subsidiary's outstanding capital stock
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or any promissory notes so issued by such Foreign Subsidiary, in each case not
theretofore pledged pursuant to a Securities Pledge Agreement, shall be pledged
to the Administrative Agent pursuant to a Securities Pledge Agreement (with
appropriate modifications to conform to and subject to limitations of law) (or
another pledge agreement in substantially similar form, if needed) and, in the
case of a failure to deliver the opinion with respect to the factors described
in clause (ii) above, such Foreign Subsidiary shall execute and deliver a
Security Agreement in substantially the form executed and delivered by the
Foreign Subsidiary Guarantors (with appropriate modifications to conform to and
subject to limitations of law) (or another security agreement in substantially
similar form, if needed) securing the Obligations of US Borrower and CH Borrower
and their obligations under any Swap Agreement with a Lender and, in the event a
Guarantee guaranteeing the Obligations of US Borrower and/or CH Borrower shall
have been executed by such Foreign Subsidiary, the obligations of such Foreign
Subsidiary thereunder and, in the case of a failure to deliver the opinion with
respect to the factors described in clause (iii) above, such Foreign Subsidiary
shall execute and deliver a Guarantee guaranteeing the Obligations of US
Borrower and CH Borrower (with appropriate modifications to conform to and
subject to limitations of law) (or another guaranty in substantially similar
form, if needed), and their obligations under any Swap Agreement with a Lender,
in each case to the extent that the entering into of such Security Agreement or
Guarantee is permitted by the laws of the respective foreign jurisdiction and
with all documents delivered pursuant to this Section 7.18 to be in form and
substance reasonably satisfactory to the Administrative Agent and the Required
Lenders; provided, however, that such Foreign Subsidiary shall not be required
to pledge pursuant to a Foreign Subsidiary Security Agreement any property or
assets that it would not have been required to pledge had it executed a Foreign
Subsidiary Security Agreement at the Closing Date.
7.19. Register. The Borrowers hereby designate the Administrative
Agent to serve as the Borrowers' agent, solely for purposes of this Section
7.19, to maintain a register (the "Register") on which it will record the
Commitment from time to time of each of the Lenders, the Loans made by each of
the Lenders and each repayment in respect of the principal amount of the Loans
of each Lender. Failure to make any such recordation or any error in such
recordation shall not affect either Borrower's obligations in respect of such
Loans. The entries in the Register shall be conclusive, in the absence of
manifest error, and the applicable Borrower, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as the
owner of a Loan or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Loan Documents, notwithstanding any
notice to the contrary. With respect to any Lender, the transfer of any
Commitment of such Lender or the rights to the principal of, and interest on,
any Loan shall not be effective until such transfer is recorded on the Register
maintained by the Administrative Agent with respect to ownership of such
Commitment or Loans and prior to such recordation all amounts owing to the
transferor with respect to such Commitment or Loans shall remain owing to the
transferor.
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The registration of assignment or transfer of all or part of any Commitment or
Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
Assignment and Acceptance pursuant to Section 11.8. Coincident with the delivery
of such an Assignment and Acceptance to the Administrative Agent for acceptance
and registration of assignment or transfer of all or part of a Loan, or as soon
thereafter as practicable, the assigning or transferor Lender shall surrender
the Note evidencing such Loan and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor Lender
and/or the new Lender. The Borrowers agree to indemnify the Administrative Agent
from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 7.19.
7.20. New Subsidiaries. In addition to their obligations with
respect to Sections 7.14, 7.15 and 7.18, if, after the Closing Date, the
Borrowers or any Subsidiary shall create or acquire any Subsidiary, the
Borrowers shall, concurrently with the creation or acquisition of such
Subsidiary, (i) cause such Subsidiary (other than (subject to Section 7.18) a
Foreign Subsidiary that is not a CH Foreign Subsidiary) to execute and deliver
to the Administrative Agent a Subsidiary Guarantee, substantially in the form of
Exhibit E-3 or E-4, as appropriate (with appropriate modifications to conform to
and subject to the limitations of foreign law), guaranteeing the applicable
Borrower's Obligations hereunder and (ii) take all necessary actions and execute
such agreements, instruments and documents, including, without limitation, stock
powers executed in blank, and deliver such opinions of counsel with respect
thereto, as the Administrative Agent may reasonably require to cause, subject to
Section 7.18, all, with respect to Domestic Subsidiaries, or at least 65% with
respect to Foreign Subsidiaries, of the capital stock of such Subsidiary owned
or controlled by the Borrowers to be pledged to the Administrative Agent to
secure the Obligations hereunder such that the Administrative Agent has a valid
and perfected first-priority security interest in such pledged capital stock or
the equivalent under applicable law.
7.21. Assumption by Mettler-Toledo, Inc. Holding shall cause MT
Acquisition Corp. and Mettler-Toledo Inc. to enter into the Assumption Agreement
by the Closing Date.
7.22. Subsidiaries to Enter into Loan Documents Post-Closing. US
Borrower shall cause each of the Subsidiaries set forth on Schedule 7.22 to, as
expeditiously as possible after the Closing Date, execute and deliver each of
the Loan Documents as set forth on Schedule 7.22 identified thereon to be
executed and delivered by such Subsidiary.
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ARTICLE VIII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any
Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding:
8.1. Limitation on Liens. The Borrowers shall not, and will not
cause or permit any Subsidiary to, create, incur, assume or suffer to exist any
Lien upon or with respect to any property or assets of either Borrower or any
Subsidiary, whether now owned or hereafter acquired, or sell any such property
or assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets or assign any right to receive income, or
file or permit the filing of any financing statement under the UCC or any other
similar effective notice of Lien under any similar recording or notice statute,
except the Lien under the Security Documents, Prior Liens and other Liens
expressly permitted by the Security Documents, and except the following, which
are herein collectively referred to as "Permitted Liens":
(a) any Lien existing on property of either Borrower or any
Subsidiary (including the Mettler-Toledo Group) on the Closing Date and
set forth in Schedule 8.1 covering only the property or assets set forth
in such Schedule 8.1 and securing Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
(c) to the extent complying with the provisions of the Security
Documents, Liens for taxes, fees, assessments or other governmental
charges which are not yet delinquent, or to the extent that non-payment
thereof is permitted by Section 7.6;
(d) to the extent complying with the provisions of the Security
Documents, Liens in respect of property or assets of US Borrower or any
Subsidiary imposed by law which were incurred in the ordinary course of
business and have not arisen to secure Indebtedness, such as landlords',
carriers', warehousemen's, mechanics', materialmen's, workmen's and
repairmen's Liens, equipment leases and other similar Liens arising in the
ordinary course of business, and (x) which do not in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of the Borrowers
or any of their respective Subsidiaries or (y) which are being contested
in good faith by appropriate proceedings, which
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proceedings have the effect of preventing the forfeiture or sale of the
property or asset subject to such Lien;
(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security or similar legislation;
(f) Liens on the property of US Borrower or any Subsidiary (other
than Collateral) securing (i) the non-delinquent performance of bids,
trade contracts (other than for borrowed money), leases or statutory
obligations, (ii) contingent obligations on surety or appeal bonds, and
(iii) other non-delinquent obligations of a like nature, in each case,
incurred in the ordinary course of business; provided, however, that all
such Liens individually or in the aggregate would not (even if enforced)
cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment liens
(including prejudgment attachment), provided that the enforcement of such
Liens is effectively stayed or payment of which is covered in full
(subject to a customary deductible) by insurance or which do not otherwise
result in an Event of Default under Section 9.1(i);
(h) easements, rights-of-way, servitudes, covenants, restrictive
covenants, encumbrances, minor defects or irregularities in title and
other similar restrictions which, individually or in the aggregate, do not
materially interfere with the ordinary conduct of the businesses of US
Borrower and the Subsidiaries and which do not materially impair for its
intended purpose the Mortgaged Real Property to which they relate;
(i) security interests (whether purchase money or otherwise) on any
property acquired, constructed or improved after the Closing Date by US
Borrower or any Subsidiary securing Indebtedness incurred or assumed for
the purpose of financing all or any part of the cost of acquiring,
constructing or improving such property; provided, however, that (i) any
such Lien attaches to such property concurrently with or within 180 days
after the acquisition thereof or the completion of construction or
improvement, (ii) such Lien attaches solely to the property so acquired,
constructed or improved in such transaction, (iii) the principal amount of
the Indebtedness secured thereby does not exceed 100% of the fair market
value of such property at the time of incurrence of such Indebtedness,
plus the cost of construction or improvement, and (iv) the principal
amount of the Indebtedness secured by any and all such security interests,
plus the aggregate amount of all Indebtedness arising under Capital Leases
permitted solely by subsection (j) below of this Section 8.1, shall not at
any time exceed a Dollar Equivalent amount of U.S. $10 million;
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(j) Liens securing obligations in respect of Capital Leases on
assets subject to such leases; provided, however, that the aggregate
amount of all Indebtedness arising under capital leases permitted solely
by this subsection (j), plus the aggregate amount of all Indebtedness
secured by security interests permitted solely by subsection (i) above of
this Section 8.1, shall not at any time exceed a Dollar Equivalent amount
of U.S. $10 million;
(k) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided, however, that (i) such deposit
account is not a dedicated cash collateral account and is not subject to
restrictions against access by US Borrower or any Subsidiary in excess of
those set forth by regulations promulgated by the FRB, and (ii) such
deposit account is not intended by US Borrower or any Subsidiary to
provide collateral to the depository institution;
(l) Liens existing on any asset prior to the date of acquisition
thereof by US Borrower or any Subsidiary which (i) were not created in
contemplation of or in connection with such acquisition and (ii) do not
extend to or cover any other property or assets of US Borrower or any
Subsidiary;
(m) Liens existing on any asset of any Person at the time such
Person becomes a Subsidiary or is merged or consolidated with or into a
Subsidiary which (i) were not created in contemplation of or in connection
with such event and (ii) do not extend to or cover any other property or
assets of US Borrower or any Subsidiary;
(n) Liens (excluding Liens on Collateral) not otherwise permitted
hereunder securing obligations not at any time exceeding in the aggregate
a Dollar Equivalent amount of U.S. $5 million;
(o) subject to the provisions of Section 8.20, Leases with respect
to the assets or properties of US Borrower or any Subsidiary, subordinate
in all respects to the Liens granted and evidenced by the Security
Documents;
(p) Liens evidenced by UCC financing statements regarding operating
and equipment leases permitted by this Agreement or in respect of
consigned goods;
(q) any encumbrance or restriction (including, without limitation,
any put and call agreements) with respect to the capital stock of any
Joint Venture or Subsidiary pursuant to the agreement governing such Joint
Venture or Subsidiary; provided,
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however, that no such encumbrance or restriction affects in any way the
ability of US Borrower or any Subsidiary to comply with Section 8.22;
(r) any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by any of
subsections 8.1(a)(i), (j), (l), (m) or (n); provided, however, that such
Indebtedness is not increased and is not secured by any additional assets
as to which a Lien is not otherwise permitted hereunder;
(s) Liens solely in favor of either Borrower or, if granted by any
Qualified Subsidiary Guarantor, any Subsidiary which is a Qualified
Subsidiary Guarantor or, if granted by any other Subsidiary, any
Subsidiary;
(t) Liens securing obligations under Swap Contracts; and
(u) Liens securing Guaranty Obligations of either Borrower in
respect of Indebtedness incurred pursuant to subsection 8.5(g); provided,
however, that the creditor in respect of such Indebtedness (or an agent on
behalf of the creditors) shall have executed and delivered an
Intercreditor Agreement and Liens on cash in a deposit account securing
Indebtedness incurred under subsection 8.5(n) to the extent that such
deposit account is established in connection therewith, not to exceed an
amount of cash equal to such Indebtedness.
8.2. Consolidations, Mergers and Disposition of Assets. The
Borrowers shall not, and shall not cause or permit any Subsidiary to, directly
or indirectly, consummate any Asset Sale or wind up, liquidate or dissolve its
affairs or merge, amalgamate, consolidate with or into, or convey, transfer,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of their respective properties or assets
(whether now owned or hereafter acquired) to or in favor of any Person, except:
(a) dispositions of inventory and of used, worn-out or surplus
equipment, all in the ordinary course of business; provided, however, that
the proceeds thereof are reinvested in the business of US Borrower or the
Subsidiaries;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to
the purchase price of similar replacement equipment;
(c) the Liens permitted by Section 8.1, the Investments permitted
pursuant to Section 8.4 and the Restricted Payments permitted by Section
8.13;
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(d) US Borrower or any Subsidiary may sell assets; provided,
however, that (x) the aggregate sale proceeds from all Assets Sales shall
not exceed the Dollar Equivalent amount of U.S. $2 million in any fiscal
year of US Borrower and (y) the Net Cash Proceeds therefrom are either
applied to repay Term Loans as provided in subsection 2.7(c) or reinvested
as provided in subsection 2.7(c);
(e) US Borrower or any Subsidiary may sell or discount, in each case
without recourse, accounts receivables arising in the ordinary course of
business, but only in connection with the compromise or collection
thereof; provided, however, that any Foreign Subsidiary may effect such
sale or discount with recourse if such is consistent with ordinary
business terms in such Subsidiary's country of business;
(f) US Borrower or any Subsidiary may, in the ordinary course of
business, license patents, trademarks, copyrights and know-how to third
Persons, so long as each such license is permitted to be assigned pursuant
to the Security Agreement and does not otherwise prohibit the granting of
a Lien therein by US Borrower or any Subsidiary pursuant to the Security
Agreement;
(g) any Subsidiary may be merged or consolidated with or into either
Borrower or any Wholly-Owned Subsidiary of US Borrower which is a
Qualified Subsidiary Guarantor and may transfer assets to either Borrower
or any Wholly-Owned Subsidiary of US Borrower which is a Qualified
Subsidiary Guarantor; provided, however, that (x) in any merger or
consolidation involving either Borrower, such Borrower shall be the
surviving corporation and (y) if the surviving corporation of such merger
or consolidation or the transferee of such assets is a Subsidiary, (i) all
of the capital stock of such Subsidiary (or, subject to Section 7.18, not
less than 65% of the capital stock of any Foreign Subsidiary) is pledged
pursuant to a Securities Pledge Agreement, (ii) such surviving Subsidiary
is a Qualified Subsidiary Guarantor, and (iii) the assets of such
surviving Subsidiary are pledged pursuant to an appropriate Security
Document;
(h) the consummation of the M-T Acquisition in accordance with the
M-T Acquisition Documents;
(i) US Borrower or any Subsidiary may sell assets set forth on
Schedule 8.2(i); provided, however, that the Net Cash Proceeds therefrom
are either applied to prepay Term Loans as provided in subsection 2.7(c)
or reinvested as provided in subsection 2.7(c);
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(j) US Borrower or any Subsidiary may sell surplus real property not
utilized in the business of US Borrower or any Subsidiary; provided,
however, that the Net Cash Proceeds therefrom are applied to prepay Term
Loans as provided in subsection 2.7(c);
(k) US Borrower or any Subsidiary may sell a line of business if (x)
the portion of the consolidated EBITDA of US Borrower and the Subsidiaries
for the latest twelve months immediately prior thereto attributable to
such business does not exceed [ ]% of the consolidated EBITDA of US
Borrower and the Subsidiaries for such latest twelve months (before giving
effect to such sale) and (y) the cumulative consolidated EBITDA of US
Borrower and the Subsidiaries since the Closing Date attributable to such
line of business when aggregated with the cumulative EBITDA of US Borrower
and the Subsidiaries attributable to all other transactions consummated
pursuant to this subsection 8.2(k) does not exceed [ ]% of the
consolidated EBITDA of US Borrower and the Subsidiaries since the Closing
Date (before giving effect to any such sale); provided, however, that the
Net Cash Proceeds therefrom are applied to prepay Term Loans as provided
in subsection 2.7(c);
(l) any Acquisition permitted by Section 8.4;
(m) any Foreign Subsidiary which is not a Qualified Subsidiary
Guarantor may merge or consolidate with or into or sell, assign or
transfer its assets to any other Foreign Subsidiary which is not a
Qualified Subsidiary Guarantor; and
(n) the abandonment or other disposition of patents, trademarks or
other intellectual property that is, in the reasonable judgment of US
Borrower, no longer economically practicable to maintain or useful in the
conduct of the business of US Borrower and the Subsidiaries, taken as a
whole.
To the extent the Required Lenders waive the provisions of this Section 8.2 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or otherwise disposed of as permitted by this Section 8.2 (and such
Collateral is released (or permitted to be released) from the Liens created by
the respective Security Document), such Collateral in each case shall be sold or
otherwise disposed of free and clear of the Liens created by the Security
Documents and the Administrative Agent shall take such actions as are
appropriate in connection therewith.
8.3. Leases. The Borrowers shall not permit, and shall not cause or
permit any Subsidiary to permit, the aggregate lease payments calculated in
accordance with GAAP (including, without limitation, any property taxes paid as
additional rent or lease payments) by US Borrower and the Subsidiaries on a
consolidated basis under any agreement to rent or lease any real or personal
property (or any extension or renewal thereof) (excluding Capital Leases)
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to exceed in any fiscal year (commencing with fiscal 1996) the Dollar Equivalent
amount of U.S. $17.5 million, increased each year after 1998 by the Dollar
Equivalent amount of U.S. $2 million.
8.4. Loans and Investments. The Borrowers shall not, and shall not
cause or permit any Subsidiary to, directly or indirectly, purchase or acquire,
or make any commitment to purchase or acquire, any capital stock, equity
interest, or obligations or other securities of, or any interest in, any Person,
or make or commit to make any Acquisition, or make or commit to make any
advance, loan, extension of credit or capital contribution to, or guarantee of
any obligation of, or any other investment in, or incurring Guaranty Obligations
on behalf of, any Person (including any Affiliate of US Borrower) (any of the
foregoing, an "Investment"), except for:
(a) Investments by US Borrower and the Subsidiaries in Cash and Cash
Equivalents;
(b) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in
the ordinary course of business;
(c) Investments (including extensions of credit (such extensions of
credit, "Intercompany Indebtedness") and Guaranty Obligations) by US
Borrower or any Subsidiary in or to US Borrower or any Wholly-Owned
Subsidiary of US Borrower which is a Qualified Subsidiary Guarantor (or in
any Person that thereby becomes a Wholly-Owned Subsidiary which is a
Qualified Subsidiary Guarantor); provided, however, that (x) with respect
to any Guaranty Obligation issued by any Subsidiary of either Borrower's
obligations, such Subsidiary has entered into a Subsidiary Guarantee at
least as favorable as such Guaranty Obligation, (y) upon request of the
Required Lenders, all such Intercompany Indebtedness shall be evidenced by
promissory notes in form, and shall be pledged to the Administrative Agent
pursuant to documentation, reasonably satisfactory to the Required Lenders
and (z) such Subsidiary shall have entered into the appropriate Security
Documents pursuant to Section 7.14 and taken all necessary action pursuant
to Section 7.15;
(d) Investments consisting of non-cash consideration received in the
form of securities, notes or similar obligations in connection with
disposition of assets permitted by subsections 8.2(d), (i), (j) or (k);
provided, however, that (i) the aggregate amount of such non-cash
consideration received in connection with any such disposition shall not
exceed 25% with respect to subsections 8.2(d), (i) and (j) and 15% with
respect to subsection 8.2(k) of the total consideration received in
connection with such disposition
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and (ii) such non-cash consideration is pledged pursuant to the
appropriate Security Document;
(e) Investments in Joint Ventures or non-Wholly-Owned Subsidiaries
(other than any Investment made to consummate any Acquisition); provided,
however, that the aggregate amount of any such Investment, plus the
aggregate value of all such Investments (excluding Investments which
constitute part of the M-T Acquisition) made by US Borrower or any
Subsidiary after the Closing Date and (without duplication) the aggregate
amount of all Guaranty Obligations permitted solely by subsection 8.8(f)
paid after the date hereof or outstanding as of the date of such
Investment, shall not exceed a Dollar Equivalent amount of U.S. $25
million (exclusive of any Investment pursuant to subsection 8.4(f));
provided, however, that any such Investment shall comply with Section 8.6;
(f) Investments made in order to consummate Acquisitions (other than
the M-T Acquisition); provided, however, that (i) no Event of Default or
Unmatured Event of Default exists or will result therefrom (including any
such event under Section 8.15), (ii) on a pro forma basis, after giving
effect to such Acquisition(s), US Borrower would have been in compliance
with Sections 8.10, 8.11 and 8.12 on the last day of the most recently
completed fiscal quarter (assuming, for purposes of Sections 8.10 and, if
applicable, 8.12, that such Acquisition had occurred on the first day of
the Computation Period ending on such last day) which compliance shall,
for any Acquisition involving consideration of the Dollar Equivalent
amount of U.S. $10 million, be demonstrated in an Officers' Certificate
delivered to the Administrative Agent and each Lender and (iii) the
aggregate Dollar Equivalent amount of the consideration (which for each
Acquisition shall be measured at the date of consummation thereof and
which shall include debt assumed, earn outs, working capital deficits and
deferred payments) paid for all Acquisitions (other than the M-T
Acquisition) consummated since the Closing Date shall not exceed the
Dollar Equivalent amount of U.S. $30 million;
(g) pledges or deposits required in the ordinary course of business
in connection with workmen's compensation, unemployment insurance and
other social security or similar legislation;
(h) pledges or deposits in connection with (i) the non-delinquent
performance of bids, trade contracts (other than for borrowed money),
leases or statutory obligations, (ii) contingent obligations on surety or
appeal bonds (including those permitted by subsection 8.8(d)), and (iii)
other non-delinquent obligations of a like nature, in each case incurred
in the ordinary course of business;
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(i) advances, loans or extensions of credit to suppliers in the
ordinary course of business by US Borrower or any Subsidiary consistent
with past practice as of the Closing Date;
(j) advances, loans or extensions of credit by US Borrower or any
Subsidiary to employees of US Borrower or any Subsidiary; provided,
however, that the aggregate amount of all such loans, advances and
extensions of credit, other than those entered into in connection with the
consummation of the M-T Acquisition and set forth on Schedule 8.4(j)
(other than advances for travel and entertainment expenses in the ordinary
course of business) shall not at any time exceed in the aggregate a Dollar
Equivalent amount of U.S. $5 million;
(k) other advances, loans or extensions of credit (excluding
advances, loans or extensions of credit of the types described in
subsection 8.4(j)) in the ordinary course of business by US Borrower or
any Subsidiary not at any time exceeding in the aggregate a Dollar
Equivalent amount of U.S. $2.5 million;
(l) Investments to consummate the M-T Acquisition on the terms set
forth in the M-T Acquisition Documents;
(m) Investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
provided, however, that any securities or other property so received is
pledged pursuant to the appropriate Security Document;
(n) Swap Contracts entered into in compliance with subsection
8.8(b);
(o) Investments in existence on the Closing Date and listed in
Schedule 8.4(o), without giving effect to any additions thereto and
Investments to be made pursuant to binding agreements in existence on the
Closing Date set forth on Schedule 8.4(o) to the extent made in accordance
with the terms of such agreements as in effect on the Closing Date;
(p) Investments (including Intercompany Indebtedness and Guaranty
Obligations) by US Borrower or any Subsidiary in any Subsidiary which is
not a Qualified Subsidiary Guarantor or which is not a Wholly-Owned
Subsidiary of US Borrower, not to exceed an aggregate amount outstanding
at any time (net of returns, dividends in cash, net cash proceeds on sale
or other cash realizations thereof) of the Dollar Equivalent amount of
U.S. $[ ]; provided, however, that upon request of the
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Required Lenders, all such Intercompany Indebtedness shall be evidenced by
promissory notes in form, and shall be pledged to the Administrative Agent
pursuant to documentation, reasonably satisfactory to the Required
Lenders;
(q) US Borrower and the Subsidiaries may hold additional Investments
in any Subsidiary which is not a Qualified Subsidiary Guarantor to the
extent that such investments reflect an increase in the value of such
Subsidiary;
(r) any Subsidiary which is not a Qualified Subsidiary Guarantor may
make Investments in or to any other Subsidiary which is not a Qualified
Subsidiary Guarantor;
(s) Investment made in connection with the Ciba Loan; provided,
however, that (x) the Administrative Agent shall have received evidence
reasonably satisfactory to it from Swiss tax authorities that the Swiss
tax authorities will refund the withholding tax payments for which such
loan is the interim source pending such repayment and (y) the Ciba Loan
Documents are pledged pursuant to the Security Documents;
(t) without duplication, Capital Expenditures permitted by Section
8.19 and the Contingent Obligations permitted by subsections 8.8(d), (g)
and (i);
(u) US Borrower or any Subsidiary may make Investments (including
Intercompany Indebtedness and Guarantee Obligations) in any Subsidiary
Guarantor which is not a Qualified Subsidiary Guarantor in an amount not
to exceed the Dollar Equivalent amount of the Obligations guaranteed by
such Subsidiary Guarantor; provided, however, that upon request of the
Required Lenders, all such Intercompany Indebtedness shall be evidenced by
promissory notes in form, and shall be pledged to the Administrative Agent
pursuant to documentation, reasonably satisfactory to the Required
Lenders;
(v) Investments by US Borrower or any Subsidiary in any Wholly Owned
Subsidiary which is not a Qualified Subsidiary Guarantor to the extent
that contemporaneously with such Investment such entity in which the
Investment is being made issues an unsubordinated note to US Borrower or a
Qualified Subsidiary Guarantor in a Dollar Equivalent amount equal to the
Dollar Equivalent amount of the value of such Investment at such time;
provided, however, that (i) such note is secured by all assets of the
entity in which the Investment is being made to the extent permitted by
applicable law; (ii) such note is pledged to the Administrative Agent on
behalf of the Lenders pursuant to the Security Documents; and (iii) such
security interests securing such note, if any, are collaterally assigned
to the Administrative Agent on behalf of the Lenders; and
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(w) Investments (including Intercompany Indebtedness and Guaranty
Obligations) by either Borrower or any Subsidiary in any Wholly-Owned
Subsidiary to the extent made in the ordinary course to fund or support
the ordinary course operations of such Wholly-Owned Subsidiary; provided,
however, that upon the request of the Required Lenders all such
Intercompany Indebtedness shall be evidenced by promissory notes in form,
and shall be pledged to the Administrative Agent pursuant to
documentation, reasonably satisfactory to the Required Lenders.
8.5. Limitation on Indebtedness. The Borrowers shall not, and shall
not cause or permit any Subsidiary to, directly or indirectly, create, incur,
assume, suffer to exist, or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, except:
(a) the Obligations;
(b) Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 8.8;
(c) Indebtedness existing on the Closing Date which is Debt to Be
Repaid or is set forth in Schedule 6.17;
(d) Indebtedness incurred in connection with Capital Leases to the
extent permitted by subsection 8.1(j) and Indebtedness incurred in
connection with the acquisition, construction or improvement of property
to the extent permitted by subsection 8.1(i);
(e) Indebtedness of Subsidiaries of US Borrower to US Borrower or CH
Borrower and, to the extent the credit extension creating such
Indebtedness is permitted by subsection 8.4(c), of any Subsidiary to any
other Subsidiary;
(f) Indebtedness of US Borrower under the Senior Subordinated Notes
in an aggregate principal amount not to exceed U.S. $[115] million less
any prepayments or repayments thereof and any guarantee thereof by any
Domestic Subsidiary in accordance with the terms of the Senior
Subordinated Note Documents as in effect on the Closing Date;
(g) Indebtedness of Foreign Subsidiaries pursuant to working capital
credit agreements or arrangements (each of which credit agreement or
arrangement shall individually not be for permanent funded debt and shall
individually provide for annual clean-down provisions for not less than 30
days or similar arrangements), not to exceed
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in the aggregate at any time for all Foreign Subsidiaries (exclusive of
any amount incurred pursuant to subsection 8.5(n)) the Dollar Equivalent
amount of U.S. $25 million;
(h) unsecured Indebtedness not to exceed in the aggregate at any
time the Dollar Equivalent amount of U.S. $10 million;
(i) Indebtedness arising from honoring a check, draft or similar
instrument against insufficient funds; provided, however, that such
Indebtedness is extinguished within five Business Days of its incurrence;
(j) obligations under operating leases permitted by Section 8.3 or
Section 8.20;
(k) Intercompany Indebtedness permitted by subsection 8.4(c);
(l) Indebtedness of a Person existing at the time such Person became
a Subsidiary or assets were acquired from such Person, to the extent such
Indebtedness was not incurred in connection with, or in contemplation of,
such Person becoming a Subsidiary or the acquisition of such assets, not
to exceed the Dollar Equivalent amount of U.S. $10 million;
(m) unsecured Indebtedness incurred by US Borrower to former
employees in connection with the purchase or redemption of stock of US
Borrower, Holding or MT Investors not to exceed in aggregate amount
outstanding the Dollar Equivalent amount of U.S. $2.5 million;
(n) Indebtedness of the Chinese Subsidiaries pursuant to local
working capital facilities and other Indebtedness not to exceed in the
aggregate for all Chinese Subsidiaries the Dollar Equivalent amount of
U.S. $15 million; and
(o) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this subsection (o), a "refinancing")
of any Indebtedness permitted by this Section 8.05, including any
successive refinancings, so long as any such refinancing Indebtedness
shall (w) not be on financial and other terms, in the reasonable judgment
of the Borrowers, that are more onerous than the Indebtedness being
refinanced, (x) not have a stated maturity or Average Life that is shorter
than the Indebtedness being refinanced, (y) be at least as subordinate to
the Obligations as the Indebtedness being refinanced (and unsecured if the
refinanced Indebtedness is unsecured) and (z) be in principal amount that
does not exceed the principal amount so refinanced plus the lesser
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of (I) the stated amount of any premium or other payment required to be
paid in connection with such refinancing pursuant to the terms of the
Indebtedness being refinanced and (II) the amount of premium or other
payment actually paid at such time to refinance the Indebtedness, plus, in
either case, the amount of reasonable expenses of the Borrowers or any
Subsidiary incurred in connection with such refinancing.
For purposes of determining compliance with any restriction limited
to a Dollar Equivalent amount in this Section 8.05, the Dollar Equivalent amount
of Indebtedness shall be calculated based on the relevant currency exchange rate
in effect on the date that such Indebtedness was incurred, in the case of term
debt, or first committed, in the case of revolving credit debt; provided,
however, that if such Indebtedness is incurred to refinance Indebtedness
denominated in a currency other than U.S. Dollars and such refinancing would
cause a Dollar Equivalent restriction to be exceeded if calculated at the
relevant currency exchange rate in effect on the date of such refinancing, such
Dollar Equivalent restriction shall not be deemed to have been exceeded so long
as the principal amount of such refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced, but the ability to make
subsequent incurrences of Indebtedness subject to the applicable Dollar
Equivalent restriction shall be determined as if the relevant currency exchange
rate applied to any such previous refinancing was the rate in effect on the date
of such refinancing.
8.6. Transactions with Affiliates. The Borrowers shall not, and
shall not cause or permit any Subsidiary to, directly or indirectly, enter into
any transaction with any Affiliate of US Borrower (other than a Borrower or a
Subsidiary (provided no portion of such Subsidiary is owned (other than through
US Borrower or the Subsidiaries) by Persons who control (directly or indirectly)
Holding)), except upon fair and reasonable terms no less favorable to such
Borrower or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate of US Borrower or such Subsidiary;
provided, however, that the following shall in any event be permitted: (a) the
payment on the Closing Date of one time fees to AEA in an aggregate amount not
to exceed U.S. $5.5 million (plus reasonable out-of-pocket expenses incurred by
AEA in providing services to US Borrower); (b) the payment, on a quarterly
basis, of management fees to AEA pursuant to the Management Services Agreement
in an aggregate amount (for all such Persons taken together) not to exceed U.S.
$250,000 in any fiscal quarter of US Borrower; provided, however, that no Event
of Default or Unmatured Event of Default pursuant to Section 9.1(a) then exists;
(c) the reimbursement of AEA for its reasonable out-of-pocket expenses incurred
by it in connection with performing management services to US Borrower and the
Subsidiaries pursuant to the Management Services Agreement; (d) Restricted
Payments permitted by subsections 8.13(c), (e), (f) and (h); (e) US Borrower and
the Domestic Subsidiaries may enter into the Tax Sharing Agreement and may make
payments thereunder; (f) the payment of reasonable and customary regular fees to
directors of US Borrower or any Subsidiary who are not employees of US Borrower
or any Subsidiary; (g) any
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transaction with an officer or member of the board of directors of US Borrower
or any Subsidiary in the ordinary course of business involving compensation,
indemnity or employee benefit arrangements; (h) loans or advances to employees
permitted by subsection 8.4(j); (i) any agreement as in existence on the Closing
Date and set forth on Schedule 8.6 (the "Existing Affiliate Agreements"); (j)
the M-T Acquisition and all transactions related thereto (including but not
limited to the financing thereof) to the extent consummated in accordance with
the M-T Acquisition Documents; (k) any transaction in the ordinary course of
business or approved by a majority of the Disinterested Directors, between US
Borrower or any Subsidiary and any Affiliate of US Borrower controlled by US
Borrower that is a Joint Venture or similar entity primarily engaged in a
Related Business; provided, however, that no person or entity which has an
economic interest in MT Investors or Holding has an interest in such Joint
Venture other than through US Borrower or any Subsidiary; and (l) US Borrower
and the Subsidiaries may enter into and perform its obligations under the Ciba
Reimbursement Agreement and the Ciba Loan Documents.
8.7. Use of Proceeds. (a) The Borrowers shall not, and shall not
cause or permit any Subsidiary to, directly or indirectly, use any portion of
the Loan proceeds or any Letter of Credit, directly or indirectly, (i) to
purchase or carry Margin Stock, (ii) to repay or otherwise refinance
Indebtedness of the Borrowers or others incurred to purchase or carry Margin
Stock or (iii) to extend credit for the purpose of purchasing or carrying any
Margin Stock.
(b) The Borrowers shall not, directly or indirectly, use any portion
of the Loan proceeds or any Letter of Credit (i) knowingly to purchase
Ineligible Securities from the Arranger during any period in which the Arranger
makes a market in such Ineligible Securities, (ii) knowingly to purchase during
the underwriting or placement period Ineligible Securities being underwritten or
privately placed by the Arranger, or (iii) to make payments of principal or
interest on Ineligible Securities underwritten or privately placed by the
Arranger and issued by or for the benefit of a Borrower or any Affiliate of a
Borrower. The Arranger is a registered broker-dealer and permitted to underwrite
and deal in certain Ineligible Securities; and "Ineligible Securities" means
securities which may not be underwritten or dealt in by member banks of the
Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C.
ss. 24, Seventh), as amended.
8.8. Contingent Obligations. The Borrowers shall not, and shall not
cause or permit any Subsidiary to, directly or indirectly, create, incur, assume
or suffer to exist any Contingent Obligations, except:
(a) endorsements for collection or deposit in the ordinary course of
business;
<PAGE>
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(b) Swap Contracts entered into in the ordinary course of business
and designed to protect against fluctuations in interest rates, currency
exchange rates, commodity prices or similar risks (including any Swap
Contract entered into pursuant to Section 7.16 or Section 7.17);
(c) Contingent Obligations of US Borrower and the Subsidiaries
existing as of the Closing Date and listed in Schedule 8.8;
(d) Contingent Obligations arising under (i) Surety Instruments
arising in the ordinary course of business of US Borrower or any
Subsidiary or (ii) any guaranty of the performance of contractual
obligations (other than obligations to pay money) of other Persons that
are not Subsidiaries so long as such guaranty arises in connection with a
project in which a Borrower or the applicable Subsidiary is otherwise
involved in the ordinary course of business, not to exceed in the
aggregate for all Contingent Obligations pursuant to this subclause (d)
the Dollar Equivalent amount of U.S. $25 million;
(e) Guaranty Obligations permitted by subsections 8.4(c), (k), (p),
(r), (u) and (w);
(f) Guaranty Obligations in respect of the Indebtedness or other
liabilities of Joint Ventures or Persons in which a Borrower or any
Subsidiary has a minority interest; provided, however, that the aggregate
amount of all such Guaranty Obligations at any time outstanding, plus the
aggregate amount of all Guaranty Obligations permitted solely by this
subsection (f) which are paid after the date hereof and (without
duplication) the aggregate amount of all Investments (excluding
Investments which constitute part of the M-T Acquisition) made after the
date hereof which are permitted solely by subsection 8.4(e), shall not
exceed in the aggregate a Dollar Equivalent amount of U.S. $25 million;
(g) other Contingent Obligations not at any time exceeding in the
aggregate a Dollar Equivalent amount of U.S. $5 million;
(h) the Guarantees and reimbursement obligations arising under the
Loan Documents in respect of drawings under Letters of Credit;
(i) Guaranty Obligations by Domestic Subsidiaries of US Borrower in
respect of US Borrower's obligations under the Senior Subordinated Notes
pursuant to the Senior Subordinated Note Documents as in effect on the
Closing Date;
(j) the Ciba Reimbursement Agreement;
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(k) Guaranty Obligations of Foreign Subsidiaries under letters of
credit; and
(l) Guarantees by either Borrower of Indebtedness of foreign
Subsidiaries permitted by subsection 8.5(g) or (n); and
(m) Guaranty Obligations in connection with sales and other
dispositions of assets permitted under Section 8.2, arising in connection
with indemnification and other agreements in respect of any contract
relating to such sale, not to exceed the consideration received by US
Borrower or any Subsidiary in connection with such sale and excluding in
all cases any Guaranty Obligation with respect to any obligation of any
third person incurred in connection with the acquisition of such assets.
8.9. Restrictions on Subsidiaries. The Borrowers shall not cause or
permit any Subsidiary to, directly or indirectly, enter into any agreement or
instrument (other than (i) the Senior Subordinated Note Documents as in effect
on the Closing Date, (ii) the Loan Documents and (iii) any agreement or
instrument relating to Indebtedness permitted by subsection 8.5(c), provided
that such restriction relates solely to such Foreign Subsidiary) which by its
terms restricts the ability of such Subsidiary (a) to declare or pay dividends
or make similar distributions, (b) to repay principal of, or pay any interest
on, any indebtedness owed to a Borrower or any other Subsidiary, (c) to make
payments of royalties, licensing fees and similar amounts to a Borrower or any
other Subsidiary or (d) to make loans or advances to, or guarantee any
Indebtedness or other obligation of, a Borrower or any other Subsidiary, except
for such encumbrances or restrictions existing under or by reason of (i)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of US Borrower or a Subsidiary, (ii) customary provisions
restricting assignment of any agreement or license entered into by US Borrower
or any Subsidiary in the ordinary course of business, (iii) customary provisions
restricting the transfer of assets subject to Liens permitted under subsections
8.1(a)(i), (j), (l), (m), (n) and (q) and (iv) applicable law (including minimum
capital requirements).
8.10. Fixed Charge Coverage Ratio. The Borrowers shall not permit,
as of the last day of any fiscal quarter (beginning with the fiscal quarter
ending December 31, 1996) ending during any period set forth below, the ratio of
(a) EBITDA less Capital Expenditures for the Computation Period ending on such
day, to (b) (x) prior to such time as four fiscal quarters of financial
information of US Borrower are not and are not required to be available pursuant
to this Agreement, Annualized Interest Expense at the end of such fiscal quarter
and (y) thereafter, Interest Expense of US Borrower and the Subsidiaries for
such Computation Period, to be less than the ratio set forth opposite such
period in the table below:
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=============================================================
Period Ratio
-------------------------------------------------------------
Closing Date through 9/30/1997 1.20:1.0
-------------------------------------------------------------
10/1/1997 through 9/30/1998 1.30:1.0
-------------------------------------------------------------
10/1/1998 through 9/30/1999 1.50:1.0
-------------------------------------------------------------
10/1/1999 through 9/30/2000 1.75:1.0
-------------------------------------------------------------
10/1/2000 through 9/30/2001 2.00:1.0
-------------------------------------------------------------
10/1/2001 through 9/30/2002 2.25:1.0
-------------------------------------------------------------
10/1/2002 through 9/30/2003 2.50:1.0
-------------------------------------------------------------
10/1/2003 and thereafter 3.00:1.0
=============================================================
8.11. Minimum Net Worth. The Borrowers will not permit the
Consolidated Net Worth (to be calculated for the purposes of this Section 8.11
without giving effect to cumulative depreciation and amortization of intangibles
and excluding net gains (but not losses) resulting from asset sales) at the end
of any fiscal quarter occurring during any period set forth below to be less
than the amount set forth opposite such period:
==============================================================
Consolidated
Period Net Worth
--------------------------------------------------------------
Closing Date through 9/30/1998 U.S.$40.0 million
--------------------------------------------------------------
10/1/1998 through 9/30/1999 U.S.$50 million
--------------------------------------------------------------
10/1/1999 through 9/30/2000 U.S.$65 million
--------------------------------------------------------------
10/1/2000 through 9/30/2001 U.S.$80 million
--------------------------------------------------------------
10/1/2001 through 9/30/2002 U.S.$110 million
--------------------------------------------------------------
10/1/2002 through 9/30/2003 U.S.$135 million
--------------------------------------------------------------
10/1/2003 through 9/30/2004 U.S.$155 million
--------------------------------------------------------------
10/1/2004 and thereafter U.S.$175 million
==============================================================
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To the extent that the final adjustments to stockholders' equity
(which shall be finalized not later than such time as necessary to be reflected
in the March 31, 1997 financial statements delivered hereunder) relating to the
write-down of research and development expense and inventory (of the nature
reflected in the pro forma financial statements in the prospectus filed with the
SEC relating to the Senior Subordinated Notes) is greater than or less than
U.S.$[ ], the amount of such excess or deficit (as the case may be) shall be
added to or subtracted from (as the case may be) each amount set forth in the
table above for each fiscal year.
8.12. Debt to EBITDA Ratio. The Borrowers shall not permit, as of
the last day of any fiscal quarter (beginning with the fiscal quarter ending
March , 1997) ending during any period set forth below, the Debt to EBITDA
Ratio to exceed the ratio set forth opposite such period in the table below:
=============================================================
Period Ratio
-------------------------------------------------------------
Closing Date - through 9/30/1997 5.85:1.0
-------------------------------------------------------------
10/1/1997 through 3/31/1998 5.65:1.0
-------------------------------------------------------------
4/1/1998 through 12/30/1998 5.50:1.0
-------------------------------------------------------------
12/31/1998 through 3/31/1999 5.00:1.0
-------------------------------------------------------------
4/1/1999 through 9/30/1999 5.00:1.0
-------------------------------------------------------------
10/1/1999 through 9/30/2000 4.50:1.0
-------------------------------------------------------------
10/1/2000 through 9/30/2001 4.00:1.0
-------------------------------------------------------------
10/1/2001 through 9/30/2002 3.50:1.0
-------------------------------------------------------------
10/1/2002 and thereafter 3.00:1.0
=============================================================
8.13. Restricted Payments. Neither Borrower shall (i) declare or
make any dividend payment or other distribution of assets, properties, cash,
rights, obligations or securities on account of any shares of any class of the
capital stock of US Borrower or any Subsidiary (other than to US Borrower or any
Subsidiary) or (ii) purchase, redeem or otherwise acquire for value, or permit
any Subsidiary to purchase or otherwise acquire for value, any shares of US
Borrower's or any Subsidiary's capital stock or any warrants, rights or options
to acquire such shares, now or hereafter outstanding owned by any Person other
than US Borrower or any
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Wholly-Owned Subsidiary of US Borrower which is a Loan Party (any such
prohibited transaction, a "Restricted Payment"), except that:
(a) US Borrower or any Subsidiary may declare and make dividend
payments or other distributions payable solely in its common stock;
(b) US Borrower or any Subsidiary may purchase, redeem, defease or
otherwise acquire or retire for value shares of its common stock or
warrants or options to acquire any such shares with shares of its common
stock;
(c) any Subsidiary may pay dividends and distributions or purchase,
redeem, defease or otherwise acquire or retire for value shares of its
common stock or warrants or options to acquire any such shares so long as
any such payments pursuant thereto by any non-Wholly-Owned Subsidiary of
US Borrower are made on a pro rata basis to such Subsidiary's shareholders
generally or are paid solely to a Loan Party;
(d) US Borrower may pay cash loans, advances, dividends or
distributions to Holding to permit Holding or MT Investors to purchase
capital stock (or options or other rights in respect thereof) of Holding
or MT Investors held by former employees of Holding or any of its
Subsidiaries following termination of their employment or pursuant to
repurchase provisions under employee stock option agreements or employee
stock purchase agreements; provided, however, that (i) no Event of Default
or Unmatured Event of Default shall then exist or would arise therefrom
and (ii) the aggregate amount of such dividends shall not exceed U.S. $2.0
million in any fiscal year and U.S. $5.0 million in the aggregate since
the Closing Date;
(e) US Borrower may pay cash dividends to Holding to enable Holding
or MT Investors to pay operating expenses (including fees and
indemnification payments to directors and officers) in the ordinary course
of business; provided, however, that (i) no Event of Default or Unmatured
Event of Default under Section 9.1(a) shall then exist or would arise
therefrom and (ii) the aggregate amount of such dividends shall not exceed
U.S. $1.0 million in any fiscal year;
(f) US Borrower may pay dividends to Holding in connection with the
payment of items specified in clauses (b) and (c) of the proviso to
Section 8.6; and
(g) US Borrower may make any payments to Holding or any parent
company of Holding to enable Holding or any parent company of Holding, as
applicable, to make payments, to holders of the common stock of US
Borrower, Holding or any parent company of Holding, as applicable, in lieu
of issuance of fractional shares of such
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common stock, in connection with any recapitalization of US Borrower,
Holding or any parent company of Holding, as applicable, such payments not
to exceed U.S. $100,000 in the aggregate.
8.14. ERISA. The Loan Parties shall not, and shall not permit any of
their ERISA Affiliates to, engage in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.
8.15. Change in Business. (a) The Borrowers shall not, and shall not
cause or permit any Subsidiary to, directly or indirectly, engage in any
material line of business substantially different from those lines of business
carried on by US Borrower and the Subsidiaries (including the Mettler-Toledo
Group) on the Closing Date.
(b) Holding will engage in no business other than its ownership of
the capital stock of US Borrower and having those liabilities which it is
responsible for under the Basic Documents to which it is a party.
Notwithstanding the foregoing, Holding may engage in those activities that are
incidental to (a) the maintenance of its corporate existence in compliance with
applicable law, (b) legal, tax and accounting matters in connection with any of
the foregoing activities and (c) the entering into, and performing its
obligations under, the Basic Documents to which it is a party.
8.16. Accounting Changes. The Borrowers shall not, and shall not
cause or permit any Subsidiary to, make any significant change in accounting
principles or reporting practices, except as required by GAAP, or change their
fiscal years.
8.17. Prepayments of Senior Subordinated Notes, etc. Holding and the
Borrowers shall not, and shall not cause or permit any Subsidiary to: (a) make
(or give any notice in respect of) any voluntary or optional payment or
prepayment or redemption or acquisition for value of the Senior Subordinated
Notes (including, without limitation, by way of depositing with any trustee with
respect thereto money or securities before such Indebtedness is due for the
purpose of paying such Indebtedness when due) or exchange of any such
Indebtedness, except that a refinancing thereof may be effected in accordance
with subsection 8.5(o); (b) amend, modify or change its certificate of
incorporation (including, without limitation, by the filing of any certificate
of designation) or its by-laws or any other organizational document or the
foreign equivalent thereof with respect to Foreign Subsidiaries (other than such
changes as are necessary to effect changes in organizational structure from
corporate to partnership form in connection with the M-T Acquisition), or any
agreement entered into by with respect to its capital stock, or enter into any
new agreement with respect to its capital stock in any manner which would be
materially adverse to the Lenders; or (c) issue any capital stock other than
non-redeemable common stock.
<PAGE>
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8.18. Amendments to Other Documents. Holding and the Borrowers shall
not and shall not cause or permit any Subsidiary to, directly or indirectly,
make any amendment, supplement or other modification of, or enter into any
consent or waiver with respect to, the subordination provisions of the Senior
Subordinated Note Documents or make any material amendment, supplement or other
modification of, or enter into any consent or waiver with respect to, any
Transaction Document or Other Document.
8.19. Capital Expenditures. The Borrowers shall not permit the
aggregate amount of all Capital Expenditures made by US Borrower and the
Subsidiaries for any fiscal year to exceed a Dollar Equivalent amount set forth
in the table below:
=============================================================
Fiscal Year U.S. Dollars
-------------------------------------------------------------
1996 30 million
-------------------------------------------------------------
1997 35 million
-------------------------------------------------------------
1998 35 million
-------------------------------------------------------------
1999 40 million
-------------------------------------------------------------
2000 40 million
-------------------------------------------------------------
2001 45 million
-------------------------------------------------------------
2002 45 million
-------------------------------------------------------------
2003 and thereafter 50 million
=============================================================
provided, however, that the unused permitted amount of such Capital Expenditures
in any fiscal year may be carried over and used in the following fiscal year if
and to the extent that such carryover amount would not result in the amount
expended in any fiscal year exceeding 125% of the amount set forth in the above
table for such year (it being understood that in any fiscal year the base
permitted amount shall be counted first towards total expenditures); provided,
further, however, that the limitation set forth above shall not include (1)
Capital Expenditures made with (i) the proceeds of additional capital
contributions by Holding or the proceeds of additional equity issuances and (ii)
Net Cash Proceeds of Asset Sales to the extent reinvested in the business as
permitted hereby or (2) Capital Expenditures related to integration costs that
arise out of the M-T Acquisition in an amount not exceeding a Dollar Equivalent
amount of U.S. $5.0 million during the period ended December 31, 1997.
8.20. Sale and Lease-Backs. The Borrowers shall not, and shall not
cause or permit any Subsidiary to, directly or indirectly, become or thereafter
remain liable as lessee or
<PAGE>
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as guarantor or other surety with respect to the lessee's obligations under any
lease, whether an operating lease or a Capital Lease, of any property (whether
real or personal or mixed), whether now owned or hereafter acquired, (i) which
US Borrower or any Subsidiary has sold or transferred or is to sell or transfer
to any other Person (other than US Borrower or any Wholly-Owned Subsidiary which
is a Qualified Subsidiary Guarantor) or (ii) which US Borrower or any Subsidiary
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Borrower or any Subsidiary to any
Person in connection with such lease, if in the case of clause (i) or (ii)
above, such sale and such lease are part of the same transaction or a series of
related transactions or such sale and such lease occur within one year of each
other or are with the same other Person, except for any transaction permitted by
subsection 8.2(d).
8.21. Sale or Discount of Receivables. Each Borrower shall not, nor
shall it cause or permit any Subsidiary to, directly or indirectly, sell, with
or without recourse, or discount (other than in connection with trade discounts
or arrangements necessitated by the creditworthiness of the other party, in each
case in the ordinary course of business consistent with past practice) or
otherwise sell for less than the face value thereof, notes or accounts
receivable, except to (i) US Borrower or any Wholly-Owned Subsidiary which is a
Qualified Subsidiary Guarantor, (ii) by Foreign Subsidiaries in the ordinary
course and consistent with past practice as of the Closing Date and the
customary practices of the applicable country and (iii) by Mettler-Toledo
(Albstadt) GmbH, Albstadt and Mettler-Toledo AG, Greifensee in connection with
the transfer of distribution rights relating to the business in Japan, not to
exceed the Dollar Equivalent amount of U.S. $4 million.
8.22 Creation of Subsidiaries. The Borrowers shall not, and shall
not cause or permit any Subsidiary to, establish, create or acquire after the
Closing Date any Subsidiary; provided, however, that, US Borrower and its
Wholly-Owned Subsidiaries shall be permitted to establish or create Wholly-Owned
Subsidiaries or any non-Wholly-Owned Subsidiary in connection with any
Investment permitted by subsection 8.4(e) so long as (i) at least 30 days' prior
written notice thereof is given to the Administrative Agent, (ii) all of the
capital stock of such new Subsidiary held by US Borrower or any Subsidiary is
pledged pursuant to a Securities Pledge Agreement and the certificates
representing such stock, together with stock powers duly executed in blank are
delivered to the Administrative Agent; provided, however, that (subject to
Section 7.18) not more than 65% of the capital stock of Foreign Subsidiaries
need be pledged, (iii) any such new Subsidiary which is a Domestic Subsidiary
shall have executed and delivered a Domestic Subsidiary Guarantee and each other
Security Document executed and delivered by the Domestic Subsidiaries on the
Closing Date and each such new CH Foreign Subsidiary shall have executed a
Foreign Subsidiary Guarantee and each other Security Document executed and
delivered by CH Foreign Subsidiaries on the Closing Date (subject to applicable
limitations under foreign law); provided, however, that any Subsidiary which is
prohibited by applicable
<PAGE>
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local law from entering into a Subsidiary Guarantee need not do so and (iv) to
the extent requested by the Administrative Agent or the Required Banks, takes
all actions required pursuant to Section 7.14 and Section 7.15. In addition,
each new Subsidiary which is a Domestic Subsidiary or a CH Foreign Subsidiary,
as the case may be, shall execute and deliver or cause to be executed and
delivered all other relevant documentation of the type described in Section 5 as
such new Subsidiary would have had to deliver if such new Subsidiary were a
Domestic Subsidiary or CH Foreign Subsidiary, as the case may be, on the Closing
Date.
8.23 Designated Senior Debt. Neither Holding nor US Borrower will,
and each of them will not permit any Subsidiary to, designate or permit the
designation of any Indebtedness (other than the Obligations) as "Designated
Senior Indebtedness" or "Designated Guarantor Senior Indebtedness" for purposes
of, and as defined in, the Senior Subordinated Note Documents.
8.24 Issuance or Disposal of Subsidiary Stock. The Borrowers shall,
directly or indirectly, not: (a) issue, sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock, partnership interests, or
other equity securities of (or warrants, rights or options to acquire shares or
other equity securities of) any Subsidiary; or (b) cause or permit any
Subsidiary to, directly or indirectly, issue, sell, assign, pledge or otherwise
encumber or dispose of any of their respective or any of their respective
Subsidiaries' shares of capital stock, partnership interests, or other
securities (or warrants, rights or options to acquire any such shares or other
securities), except, in each case under clause (a) or (b), (i) to US Borrower or
any of its Wholly-Owned Subsidiaries, (ii) to qualify directors if required by
applicable law, (iii) the pledge thereof pursuant to the Security Documents and
(iv) as permitted by subsection 8.2(k) (provided such sale is for all of the
capital stock of such Subsidiary) or by subsection 8.13(a) or (b).
8.25 Limitation on Other Restrictions on Amendment of Basic
Documents. None of Holding, the Borrowers or the Subsidiaries shall enter into,
suffer to exist or become or remain subject to any agreement or instrument to
which any of them is a party or to which any of them or any property of any of
them (now owned or hereafter acquired) may be subject or bound (except for the
Loan Documents or the other Basic Documents (but with respect to the Basic
Documents that are not Loan Documents, only as to themselves)) that would
prohibit or restrict (including by way of any covenant, representation or
warranty or event of default), or require the consent of any Person to any
amendment to, or waiver or consent to departure from the terms of, any Basic
Document (which, in the case of the Basic Documents that are not Loan Documents,
would be materially adverse to the Lenders).
<PAGE>
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ARTICLE IX.
EVENTS OF DEFAULT
9.1. Event of Default. Any of the following shall constitute an
"Event of Default":
(a) Non-Payment. Either Borrower fails to pay, (i) when and as
required to be paid herein, any principal of any Loan or of any L/C
Obligation or (ii) within three days after the same becomes due, any
interest, fee or any other amount payable under any Loan Document.
(b) Representation or Warranty. Any representation or warranty by
any Loan Party made or deemed made in any Loan Document, or which is
contained in any certificate, document or financial or other statement by
any Loan Party or any Responsible Officer furnished at any time under any
Loan Document, is incorrect in any material respect on or as of the date
made or deemed made.
(c) Specific Defaults. Any Loan Party fails to perform or observe
any term, covenant or agreement contained in Section 7.3(a) or in Article
VIII.
(d) Other Defaults. Any Loan Party fails to perform or observe any
term, covenant or agreement (other than those referred to in subsections
9.1(a), (b) or (c) above) contained in any Loan Document, and such failure
shall continue unremedied for a period of at least 30 days after the date
upon which written notice thereof is given to the Borrowers by the
Administrative Agent or any Lender.
(e) Cross-Default. (i) Any Company fails to make any payment in
respect of any one or more issues of Indebtedness (other than the
Obligations) or Contingent Obligation having an aggregate principal Dollar
Equivalent amount of more than U.S. $5 million beyond the period of grace,
if any, provided in the instrument or agreement under which such
Indebtedness or Contingent Obligation was created or by which it is
governed; or (ii) any Company fails to perform or observe any other term,
condition or covenant, or any other event shall occur or condition exist,
under any agreement or instrument relating to any Indebtedness or
Contingent Obligation, if the effect of such failure, event or condition
is to cause, or to permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Indebtedness or Contingent Obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, such Indebtedness to be declared to be due and
payable prior to its stated maturity or such Contingent Obligation to
become payable or cash collateral in
<PAGE>
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respect thereof to be demanded; provided, however, that the aggregate
amount of all such Indebtedness or Contingent Obligations so affected and
cash collateral so required shall be in a Dollar Equivalent amount of U.S.
$5 million or more.
(f) Insolvency; Voluntary Proceedings. Any Company (i) ceases or
fails to be solvent, or generally fails to pay, or admits in writing its
inability to pay, its debts as they become due; (ii) commences or consents
to any Insolvency Proceeding with respect to itself; or (iii) takes any
action to effectuate or authorize any of the foregoing.
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against any Company, or any writ,
judgment, warrant of attachment, execution or similar process is issued or
levied against a Company, and such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded, within 60
days after commencement, filing or levy; (ii) any Company admits the
material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law)
is ordered in any Insolvency Proceeding; or (iii) any Company acquiesces
in the appointment of a receiver, trustee, custodian, conservator,
liquidator, mortgagee in possession (or agent therefor), or other similar
person for itself or a substantial portion of its property or business.
(h) ERISA. (i) An ERISA Event shall occur with respect to a Pension
Plan or a Multiemployer Plan which has resulted or is reasonably likely to
result in liability of a Loan Party under Title IV of ERISA to such
Pension Plan or Multiemployer Plan or to the PBGC in an aggregate Dollar
Equivalent amount in excess of U.S. $1,000,000; or (ii) the aggregate
Dollar Equivalent amount of Unfunded Pension Liability among all Pension
Plans at any time exceeds U.S. $1,000,000 and as a result thereof a lien
shall be imposed, a security interest shall be granted or a material
liability is incurred, which lien, security interest or liability, in the
reasonable judgment of the Required Lenders, is reasonably likely to
result in a Material Adverse Effect.
(i) Monetary Judgments. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against
any Company involving in the aggregate a liability (to the extent not
covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related series of transactions,
incidents or conditions, of a Dollar Equivalent amount of U.S. $5 million
or more, and the same shall remain unvacated and unstayed pending appeal
for a period of 30 days after the entry thereof.
<PAGE>
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(j) Non-Monetary Judgments. Any non-monetary judgment, order or
decree is entered against any Company which does or would reasonably be
expected to have a Material Adverse Effect, and there shall be any period
of 30 consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect.
(k) Guarantees. Any Guarantee ceases to be in full force and effect
(other than due to any effect of applicable foreign law not known by U.S.
Borrower or any Subsidiary) or any of the Guarantors repudiates, or
attempts to repudiate, any of its obligations under any of the Guarantees.
(l) Security Documents. Any Security Document shall cease to be in
full force and effect (other than due to any effect of applicable foreign
law not known by U.S. Borrower or any Subsidiary), or shall cease to give
the Administrative Agent the Liens, rights, powers and privileges
purported to be created thereby, in favor of the Administrative Agent,
superior to and prior to the rights of all third Persons and subject to no
Liens other than Prior Liens and Liens expressly permitted by the
applicable Security Document, or any judgment creditor having a Lien
against any item of Collateral shall commence legal action to foreclose
such Lien or otherwise exercise its remedies against any item of
Collateral or either Borrower or any Subsidiary fails to comply with or to
perform any material obligation or agreement under any Security Document
within ten days after being requested by the Administrative Agent or any
Lender.
(m) Change of Control. Any Change of Control shall occur.
(n) Senior Subordinated Notes. The subordination provisions relating
to the any Senior Subordinated Note Document (the "Subordination
Provisions") shall fail to be enforceable by the Lenders (which have not
effectively waived the benefits thereof) in accordance with the terms
thereof, or any Obligation shall fail to constitute Senior Indebtedness
(as defined in the Senior Subordinated Note Documents); or US Borrower or
any Subsidiary shall, directly or indirectly, disavow or contest in any
manner any of the Subordination Provisions.
(o) Ciba Reimbursement Agreement. Any [event of default] shall occur
under the Ciba Reimbursement Agreement.
9.2. Remedies. If any Event of Default occurs, the Administrative
Agent shall, at the request, or may, with the consent, of the Required Lenders:
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(a) declare the commitment of each Lender to make Loans and the
obligation of the L/C Lender to Issue Letters of Credit to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare an amount equal to the maximum aggregate amount that is
or at any time thereafter may become available for drawing under any
outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or
other documents required to draw under such Letters of Credit) to be
immediately due and payable, and declare the unpaid principal amount of
all outstanding Loans, all interest accrued and unpaid thereon, and all
other amounts owing or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrowers;
(c) direct the Borrowers to pay (and the Borrowers agree that upon
receipt of such notice, or upon the occurrence of an Event of Default
specified in subsection 9.1(f) or (g) with respect to either Borrower,
such Borrower will pay) to the Administrative Agent at the Administrative
Agent's Payment Office such additional amount of cash, to be held as
security by the Administrative Agent, as is equal to the aggregate undrawn
face amount of all Letters of Credit issued for the account of either
Borrower and then outstanding; and
(d) exercise on behalf of the Administrative Agent and the Lenders
all rights and remedies available to the Administrative Agent and the
Lenders under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 9.1, the obligation of each Lender to make Loans and any
obligation of the L/C Lender to Issue Letters of Credit, shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable without further act of the Administrative Agent, the L/C Lender or any
other Lender.
9.3. Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
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ARTICLE X.
THE AGENTS
10.1. Appointment and Authorization. (a) Each Lender hereby
irrevocably (subject to Section 10.9) appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, none of the
Administrative Agent, the Documentation Agent or any Co-Agent shall not have any
duties or responsibilities except those expressly set forth herein, nor shall
any of the Administrative Agent, the Documentation Agent or any Co-Agent have or
be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against any of the Administrative Agent, the Documentation Agent or any
Co-Agent. The provisions of this Article X are solely for the benefit of the
Agents, the Co-Agents and the Lenders, and no Loan Party shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, the Administrative Agent shall act
solely as Administrative Agent of the Lenders and the Administrative Agent does
not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for any Loan Party. Neither the
Documentation Agent or any Co-Agent shall have any responsibilities under any
Loan Document.
(b) The L/C Lender shall act on behalf of the Revolving Facility
Lenders with respect to any Letters of Credit Issued by it and the documents
associated therewith until such time and except for so long as the
Administrative Agent may agree at the request of the Required Lenders to act for
the L/C Lender with respect thereto; provided, however, that the L/C Lender
shall have all of the benefits and immunities (i) provided to the Administrative
Agent in this Article X with respect to any acts taken or omissions suffered by
the L/C Lender in connection with Letters of Credit Issued by it or proposed to
be Issued by it and the application and agreements for letters of credit
pertaining to the Letters of Credit as fully as if the term "Administrative
Agent," as used in this Article X, included the L/C Lender with respect to such
acts or omissions and (ii) as additionally provided in this Agreement with
respect to the L/C Lender.
(c) Each Swing Line Lender shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Article X with
respect to any acts taken or omissions suffered by such Swing Line Lender in
connection with Swing Line Loans made or
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proposed to be made by it as fully as if the term "Administrative Agent," as
used in this Article X, included the Swing Line Lenders with respect to such
acts or omissions and (ii) as additionally provided in this Agreement with
respect to the Swing Line Lenders.
10.2. Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
10.3. Exculpatory Provisions. None of the Administrative Agent, the
Documentation Agent, the Arranger, any Co-Agent or any of their respective
Affiliates shall (i) be liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Loan
Document or under any other document or instrument referred to or provided for
herein or therein or the transactions contemplated hereby or thereby (except for
its own gross negligence or willful misconduct), (ii) be responsible in any
manner to any of the Lenders for any recital, statement, representation or
warranty made by any Loan Party or any Subsidiary or Affiliate of any Loan
Party, or any officer thereof, contained in this Agreement or in any other Loan
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by any of them under or in connection with, this
Agreement or any other Loan Document, or the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or any other document referred to or provided for herein or therein, or
for any failure of any Loan Party or any other party to any Loan Document to
perform its obligations hereunder or thereunder, (iii) except to the extent
that, with respect to the Administrative Agent, it is expressly instructed by
the Lenders with respect to collateral security under the Security Documents, be
required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Loan Document or (iv) with respect to the
Administrative Agent, be under any obligation to take any action hereunder or
under any other Loan Document if the Administrative Agent believes in good faith
that taking such action may conflict with any law or any provision of any Loan
Document, or may require the Administrative Agent to qualify to do business in
any jurisdiction where it is not then so qualified. None of the Administrative
Agent, the Documentation Agent, the Arranger, any Co-Agent or any of their
respective Affiliates shall be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of any Loan Party or any Subsidiary or
Affiliate of any Loan Party.
10.4. Reliance by Administrative Agent. (a) The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice,
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consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to any Loan Party or any Subsidiary), independent accountants
and other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document, unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document, in accordance with a request or
consent of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter either sent by the Administrative Agent to such Lender
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender.
10.5. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Event of Default or
Unmatured Event of Default, unless the Administrative Agent shall have received
written notice from a Lender or a Borrower referring to this Agreement,
describing such Event of Default or Unmatured Event of Default and stating that
such notice is a "notice of default." If the Administrative Agent receives such
a notice, the Administrative Agent will notify the Lenders of its receipt
thereof. The Administrative Agent shall take such action with respect to such
Event of Default or Unmatured Event of Default as may be requested by the
Required Lenders in accordance with Article IX; provided, however, that, unless
and until the Administrative Agent has received any such request, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default or
Unmatured Event of Default as it shall deem advisable or in the best interest of
the Lenders except to the extent that this Agreement expressly requires
otherwise.
10.6. Credit Decision. Each Lender acknowledges that none of the
Administrative Agent, the Documentation Agent, the Arranger, any Co-Agent or any
of their respective Affiliates has made any representation or warranty to it,
and that no act by the Administrative Agent hereafter taken, including any
review of the affairs of any Loan Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent, the
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Documentation Agent, the Arranger, any Co-Agent or any Lender. None of the
Administrative Agent, the Documentation Agent, the Arranger or any Co-Agent
shall be required to keep itself informed as to the performance or observance by
any Lender of this Agreement or any of the other Loan Documents or any other
document referred to or provided for herein or therein or to inspect the
properties or books of any Loan Party. Each Lender represents to the
Administrative Agent, the Documentation Agent, the Arranger and the Co-Agents
that it has, independently and without reliance upon the Administrative Agent,
the Documentation Agent, the Arranger, any Co-Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan
Parties, and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit hereunder. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent, the
Documentation Agent, the Arranger, any Co-Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement or any other Loan Document, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties. Except for notices, reports and other
documents and information expressly herein required to be furnished to the
Lenders by the Administrative Agent, none of the Administrative Agent, the
Documentation Agent, the Arranger or any Co-Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Loan Parties which may come into the
possession of the Administrative Agent, the Documentation Agent, the Arranger,
any Co-Agent or any of their respective Affiliates.
10.7. Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Administrative Agent, the Documentation Agent, the Arranger, the Co-Agents and
each of their respective Affiliates (to the extent not reimbursed by or on
behalf of the Borrowers in accordance with the terms hereof and without limiting
the obligation of the Borrowers to do so), pro rata (determined on the same
basis used in determining Required Lenders), from and against any and all
Indemnified Liabilities which may at any time be imposed on, incurred by or
asserted against the Administrative Agent, the Documentation Agent, the Arranger
or any Co-Agent in their respective capacity as such (including by any Lender)
arising out of or by reason of any investigation in any way relating to or
arising out of this Agreement or any other Loan Document, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or the enforcement of any of the terms hereof or
thereof or of any such other documents; provided, however, that no Lender shall
be liable for the payment
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to the Administrative Agent, the Documentation Agent, the Arranger or any
Co-Agent or any of their respective Affiliates of any portion of the Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share (determined on the same
basis used in determining Required Lenders) of any costs or out-of-pocket
expenses (including Attorney Costs) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein or therein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrowers. The agreements set forth in this Section 10.7 shall survive the
payment of all Loans and other obligations hereunder and the resignation or
replacement of the Administrative Agent and shall be in addition to and not in
lieu of any other indemnification agreements contained in any other Loan
Document.
10.8. Administrative Agent in Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with the Loan Parties and Affiliates of the Loan Parties as
though the Administrative Agent were not the Administrative Agent hereunder,
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, the Administrative Agent and its Affiliates may
receive information regarding the Loan Parties or their Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Borrowers or such Affiliates) and acknowledge that the Administrative Agent and
its Affiliates shall be under no obligation to provide such information to them.
With respect to its Loans, the Administrative Agent (and any of its Affiliates
which may become a Lender) shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Administrative Agent or the L/C Lender. The terms "Lender" and "Lenders"
shall, unless the context otherwise indicates, include the Administrative Agent
in its individual capacity.
10.9. Successor Administrative Agent. The Administrative Agent may,
and at the request of the Required Lenders shall, resign as Administrative Agent
upon 30 days' notice to the Lenders and the Borrowers. If the Administrative
Agent resigns under this Agreement, the Required Lenders shall appoint from
among the Lenders a successor Administrative Agent which successor agent shall,
so long as no Event of Default exists, be subject to the approval of the
Borrowers (which approval shall not be unreasonably withheld or delayed). If no
successor agent is appointed prior to the effective date of the resignation of
the Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrowers, a successor agent, from among the Lenders.
Upon the acceptance of its appointment
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as successor agent hereunder, such successor agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent, "Administrative
Agent" shall mean such successor agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After the retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article X and Section 11.4 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Administrative Agent under this Agreement. If no successor agent has
accepted appointment as the Administrative Agent by the date which is 30 days
following the retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. Each successor Administrative Agent shall
comply with Subsection 4.1(f).
10.10. Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person or entity who, at the time of making such
request or giving such consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
10.11. Failure to Act. Except for action expressly required of the
Administrative Agent hereunder and under the other Loan Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 10.7 against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.
ARTICLE XI.
MISCELLANEOUS
11.1. Amendments and Waivers. (a) No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by either Borrower therefrom, shall be effective unless
the same shall be in writing and signed by the Required Lenders (or by the
Administrative Agent at the written request of the Required Lenders) and the
Borrowers and acknowledged by the Administrative Agent, and then any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment or
consent shall, unless in
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writing and signed by all the Non-Defaulting Lenders and the Borrowers and
acknowledged by the Administrative Agent, do any of the following: (i) increase
or extend the term of any of the Commitments (it being understood that a waiver
of any condition, covenant violation Event of Default or Unmatured Event of
Default shall not constitute a change in the terms of any Commitment of any
Lender) or extend the time or waive any requirement for the reduction or
termination of any of the Commitments (or reinstate any Commitment terminated
pursuant to Section 9.2) or change the currency in which any Loan or L/C
Obligation is payable except as expressly permitted herein (provided that the
consent of the Lenders whose Loans are being so changed (and none other) shall
be required); (ii) postpone or delay any date fixed by any Loan Document for any
payment of principal, interest, fees or other amounts due to the Lenders (or any
of them) under any Loan Document; (iii) reduce the principal of, or the rate of
interest specified herein (other than as a result of waiving the applicability
of any post-default increase in interest rates) on, any Loan or (subject to
clause (5) below) any fees or other amounts payable under any Loan Document;
(iv) modify the definition of the term "Required Lenders", "Required Revolving
Facility Lenders" or "Majority Lenders of the Affected Tranche" or change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans and L/C Obligations which is required for the Lenders or any of them to
take any action hereunder; (v) amend or release the Guarantees or release any
material portion of the Collateral (except upon a permitted sale of the capital
stock of a Guarantor and except as expressly permitted by the Loan Documents);
(vi) amend this Section, Section 2.15, Article IV, or Section 11.4 or any
provision herein or under any Loan Document providing for consent or other
action by all Lenders; (vii) release any Guarantor from its obligations under
its Guarantee (except upon a permitted sale of such Guarantor); or (viii)
consent to the assignment or transfer by any Loan Party of its rights and
obligations under any Loan Document or the making of any assignment of Loans or
other Obligations or participation therein to the Borrowers or any Affiliate
thereof; provided, further, however, that (1) no amendment, waiver or consent
shall, unless in writing and signed by the L/C Lender in addition to the
Required Lenders or all Lenders, as the case may be, affect the rights or duties
of the L/C Lender under this Agreement or any L/C-Related Document, (2) no
amendment, waiver or consent shall, unless in writing signed by the Swing Line
Lenders in addition to the Required Lenders or all Non-Defaulting Lenders, as
the case may be, affect the rights or duties of either Swing Line Lender under
any Loan Document, (3) no amendment, waiver or consent shall, unless in writing
and signed by the applicable Agent in addition to the Required Lenders or all
Non-Defaulting Lenders, as the case may be, affect the rights or duties of the
applicable Agent under any Loan Document, (4) no amendment, waiver or consent
(including any of the foregoing with respect to any representation, warranty,
covenant, default or other matter which is otherwise effective for purposes of
this Agreement) shall, unless in writing and signed by the Required Revolving
Facility Lenders, be effective for determining whether the conditions precedent
to any Credit Extension under the Revolving Facility have been satisfied, (5)
the Fee Letters may be amended, or rights or privileges thereunder waived, in
accordance with their respective terms and (6) no amendment, waiver or
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consent shall, unless in writing signed by the Majority Lenders of the Affected
Tranche, in addition to the Required Lenders, change the application of
prepayments under Section 2.7 as among the Term Loan Facilities or the order in
which such prepayments are applied to any such Facility (although any required
prepayment under Section 2.7 may be waived or amended, in whole or in part, by
the Required Lenders so long as the application of any such prepayment which is
still made is not altered) or extend or reduce any scheduled installment payment
under Section 2.9. In the case of any waiver effected in accordance with this
Section 11.1, the Loan Parties, the Lenders and the Administrative Agent shall
be restored to their former position and rights under each Loan Document, and
any Event of Default or Unmatured Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Event of Default or Unmatured Event of Default, or impair any right
consequent thereon. Any amendment, waiver or consent effected in accordance with
this Section 11.1 shall be binding upon each holder of the Notes at the time
outstanding, each future holder of the Notes and, if signed by the Borrowers, on
the Borrowers and the other Loan Parties.
(b) If, in connection with any proposed amendment, waiver or consent
to any of the provisions of this Agreement as contemplated by clauses
(i)-(viii), inclusive, of the first proviso to subsection 11.1(a), the consent
of the Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then the Borrowers shall have
the right to replace each such non-consenting Lender or Lenders (so long as all
non-consenting Lenders are so replaced) with one or more Replacement Lenders
pursuant to Section 4.8 so long as at the time of such replacement each such
Replacement Lender consents to the proposed amendment, waiver or consent;
provided, however, that the Borrowers shall not have the right to replace a
Lender solely as a result of the exercise of such Lender's rights (and the
withholding of any required consent by such Lender) pursuant to the second
proviso to subsection 11.1(a).
11.2. Notices. (a) Except as otherwise expressly provided herein,
all notices, requests and other communications hereunder and under the Security
Documents (including any modifications of, or waivers, requests or consents
under, this Agreement) shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission, provided that any
matter transmitted by either Borrower to the Administrative Agent by facsimile
shall be immediately confirmed by a telephone call to the recipient at the
number specified on Schedule 11.2) and mailed, faxed or delivered to the
applicable party at the address or facsimile number specified for notices on
Schedule 11.2; or, as directed to either Borrower or the Administrative Agent,
to such other address as shall be designated by such party in a written notice
to the other parties, and as directed to any other party, at such other address
as shall be designated by such party in a written notice to the Borrowers and
the Administrative Agent.
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(b) All such notices, requests and communications shall be
effective, (i) if transmitted by overnight delivery or faxed, when delivered or
transmitted in legible form by facsimile machine, respectively, (ii) if mailed,
upon receipt or (iii) if delivered, upon delivery; except that notices pursuant
to Article II, III or X to the Administrative Agent shall not be effective until
actually received by the Administrative Agent, and notices pursuant to Article
III to the L/C Lender shall not be effective until actually received by the L/C
Lender.
(c) Any agreement of the Administrative Agent and the Lenders herein
to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrowers. The Administrative Agent and
the Lenders shall be entitled to rely on the authority of any Person purporting
to be a Person authorized by a Borrower to give such notice, and the
Administrative Agent and the Lenders shall not have any liability to the
Borrowers or any other Person on account of any action taken or not taken by the
Administrative Agent or any Lender in reliance upon such telephonic or facsimile
notice. The obligation of the Borrowers to repay the Loans and L/C Obligations
shall not be affected in any way or to any extent by any failure by the
Administrative Agent or any Lender to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Administrative Agent or any
Lender of a confirmation which is at variance with the terms understood by the
Administrative Agent or such Lender to be contained in the telephonic or
facsimile notice.
11.3. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under any other Loan Document,
and no course of dealing between any Loan Party and any of the Administrative
Agent or Lenders shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder or under any
other Loan Document preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege hereunder or under such
other Loan Document. The rights and remedies expressly provided herein are
cumulative and not exclusive of any rights or remedies provided by law. No
notice to or demand upon any Loan Party in any case shall entitle any Loan Party
to any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agents or the Lenders to any other or
further action in any circumstance without notice or demand.
11.4. Expenses, Indemnity, etc. The Borrowers agree: (a) to pay or
reimburse the Agents for all of their reasonable out-of-pocket costs and
expenses (including the reasonable fees and expenses of Cahill Gordon & Reindel
and of all local and foreign counsel) in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement and the other Loan
Documents and the extensions of credit hereunder, the administration of the
transactions contemplated hereby (including the monitoring of the Collateral)
and the Arranger's syndication efforts (including the Agents' due diligence
investigation expenses) with respect to this
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Agreement and (ii) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any of the other
Loan Documents (whether or not consummated or effective); (b) to pay or
reimburse each of the Lenders and the Administrative Agent for all reasonable
out-of-pocket costs and expenses of the Lenders and the Administrative Agent
(including Attorney Costs of the Administrative Agent and the Lenders) in
connection with (i) protection of the Lenders' rights following any Event of
Default and any enforcement or collection proceedings resulting therefrom,
including all manner of participation in or other involvement with (x)
bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation
proceedings, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 11.4; and (c) to pay or reimburse each of the
Lenders and the Administrative Agent for all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any of the other Loan
Documents or any other document referred to herein or therein and all costs,
expenses, taxes, assessments and other charges (including title insurance and
Attorney Costs) incurred in connection with any filing, registration, recording
or perfection of any security interest contemplated by any Loan Document or any
other document referred to therein.
The Borrowers agree, whether or not the transactions contemplated
hereby are consummated, to indemnify each Lender, each Agent, each Co-Agent and
each of their respective directors, officers, employees, attorneys and agents
(each, an "Indemnified Person") from, and hold each of them harmless against,
any and all Losses incurred by any of them in connection with any Proceeding
(whether or not any Agent, any Co-Agent or any Lender is a party thereto and
whether or not brought by or on behalf of any Loan Party or any other Person)
arising out of or by reason of relating to any of the Loan Documents, the
extensions of credit hereunder or any actual or proposed use by the Borrowers or
any Subsidiary of the proceeds of any of the extensions of credit hereunder or
the use of any collateral security for the Loans (including the exercise by the
Administrative Agent or any Lender of the rights and remedies or any power of
attorney with respect thereto and any action or inaction in respect thereof),
but excluding any such Losses to the extent resulting from the gross negligence
or bad faith of the Indemnified Person. Without limiting the generality of the
foregoing, the Borrowers agree to (x) indemnify the Administrative Agent for any
payments that the Administrative Agent is required to make under any indemnity
issued to any Lender referred to in any Security Document and (y) indemnify each
Lender and each other Indemnified Person from, and hold each Lender and each
other Indemnified Person harmless against, any Losses described in the preceding
sentence (but excluding, as provided in the preceding sentence, any Loss to the
extent resulting from the gross negligence or bad faith of such Indemnified
Person) arising under any Environmental Law based on or arising out of (A) the
past, present or future operations of either Borrower or any Subsidiary (or any
predecessor in interest to either Borrower or any
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Subsidiary), (B) the past, present or future condition of any facility or
property owned, operated or leased at any time by either Borrower or any
Subsidiary (or any of their respective predecessors in interest), or (C) any
Release or threatened Release of any Hazardous Materials at, under or from any
such facility or property, including, without limitation, any such Release or
threatened Release that shall occur during any period when any Lender or other
Indemnified Person shall be in possession of any such facility or property
following the exercise by such Lender or other Indemnified Person of any of its
rights and remedies hereunder or under any of the Security Documents, and the
alleged disposal or alleged arranging for disposal or treatment of any Hazardous
Materials by either Borrower or any Subsidiary (or any of their respective
predecessors in interest) at any third-party site.
To the extent that the undertaking to indemnify and hold harmless
set forth in this Section 11.4 is unenforceable because it is violative of any
law or public policy or otherwise, the Borrower shall contribute the maximum
portion that each of them is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all indemnified liabilities incurred by any
of the Persons indemnified hereunder.
The Borrowers also agree that no Indemnified Person shall have any
liability (whether direct or indirect, in contract or tort or otherwise) for any
Losses to any Loan Party or any Loan Party's security holders or creditors
resulting from, arising out of, in any way related to or by reason of, any
matter referred to in the second paragraph of this Section 11.4, except to the
extent that any Loss resulted from the gross negligence or bad faith of such
Indemnified Person.
In the event that any Indemnified Person is requested or required to
appear as a witness in any Proceeding brought by or on behalf of or against any
Loan Party or any affiliate of any Loan Party in which such Indemnified Person
is not named as a defendant, the Borrowers agree to reimburse each Indemnified
Person for all reasonable out-of-pocket expenses and all reasonable allocable
costs of in-house legal counsel incurred by each Indemnified Person in
connection with such Indemnified Person's appearing and preparing to appear as
such a witness, including the reasonable fees and disbursements of one common
counsel for all Indemnified Persons.
The Borrowers agree that, without the prior written consent of the
Administrative Agent, the Arranger and the Required Lenders, no Loan Party will
settle, compromise or consent to the entry of any judgment in any pending or
threatened Proceeding in respect of which indemnification could be sought under
the indemnification provisions of this Section 11.4 (whether or not any
Indemnified Person is an actual or potential party to such Proceeding), unless
such settlement, compromise or consent includes an unconditional written release
reasonably satisfactory to the Administrative Agent, the Arranger and the
Required Lenders of
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each Indemnified Person from all liability arising out of such Proceeding and
does not include any statement as to an admission of fault, culpability or
failure to act by or on behalf of any Indemnified Person and does not involve
any payment of money or other value by any Indemnified Person or any injunctive
relief or factual findings or stipulations binding on any Indemnified Person. No
Indemnified Person shall settle, compromise or consent to the entry of any
judgment in any pending or threatened Proceeding without the prior written
consent of the Borrowers, which consent shall not be unreasonably withheld or
delayed.
11.5. Payments Pro Rata. Subject to Section 2.15, the Administrative
Agent agrees that promptly after its receipt of each payment from or on behalf
of any Loan Party in respect of any Obligations of such Loan Party, it shall
distribute such payment to the Lenders based upon their respective Pro Rata
Shares, if any, of the Obligations with respect to which such payment was
received.
11.6. Payments Set Aside. To the extent that a Borrower makes a
payment to the Administrative Agent or any Lender, or the Administrative Agent
or any Lender exercises its right of set-off, and such payment or the proceeds
of such set- off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its pro rata
share of any amount so recovered from or repaid by the Administrative Agent.
11.7. Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
11.8. Assignments and Participations, etc. (a) The Borrowers may not
assign their rights or obligations hereunder or under the Notes without the
prior written consent of all of the Lenders and the Administrative Agent.
(b) Any Lender may, with the written consent of the Borrowers (which
consent of the Borrowers shall not be unreasonably withheld or delayed (it being
understood that, among other things, the imposition of any withholding tax on
payments to such Eligible Assignee at the time of assignment or the inability of
an Eligible Assignee to provide Loans in an Offshore Currency at the time of
assignment (unless all Lenders are then so unable) shall be reasonable grounds
to withhold consent)) and the Administrative Agent (and the Swing Line Lenders
and the L/C Lender in the case of any assignment of Revolving Facility
Commitments), at any time
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assign and delegate to one or more Eligible Assignees (provided that no written
consent of the Borrowers, the Administrative Agent, either Swing Line Lender or
the L/C Lender shall be required in connection with any assignment and
delegation by a Lender to an Eligible Assignee that is an Affiliate of such
Lender or to another Lender) (each an "Assignee") (in which case, the Assignee
and assignor Lenders shall give notice of the assignment to the Administrative
Agent) all or any part of the Loans, the Commitments, the L/C Obligations and
the other rights and obligations of such Lender hereunder, in a minimum Dollar
Equivalent amount of U.S. $5 million or, if less, the entire amount of all
Loans, the Commitments, L/C Obligations and other rights and obligations of such
Lender hereunder; provided, however, that (i) in no event may any such
assignment be made to the Borrowers or any of their Affiliates; and (ii) the
Borrowers and the Administrative Agent may continue to deal solely and directly
with such Lender in connection with the interest so assigned to an Assignee
until (x) written notice of such assignment, together with payment instructions,
addresses and related information with respect to the Assignee, shall have been
given to the Borrowers and the Administrative Agent by such Lender and the
Assignee; (y) such Lender and its Assignee shall have delivered to the Borrowers
and the Administrative Agent an Assignment and Acceptance in the form of Exhibit
G ("Assignment and Acceptance") together with any Note or Notes subject to such
assignment and (z) the assignor Lender shall have paid to the Administrative
Agent a processing fee in the amount of U.S. $3,000. Notwithstanding any other
term of this subsection 11.8(b), the agreement of Scotiabank and Credit Suisse
to provide the Swing Line Commitment shall not impair or otherwise restrict in
any manner the ability of Scotiabank or Credit Suisse to make any assignment of
its Loans or Commitments in accordance with the provisions of this Section 11.8,
it being understood and agreed that Scotiabank or Credit Suisse may terminate
its Swing Line Commitment, either in whole or in part, in connection with the
making of any assignment; provided, however, that the Assignee assumes the Swing
Line Commitment of Scotiabank or Credit Suisse, as the case may be; provided,
further, however, that if the Revolving Facility Commitment of Scotiabank or
Credit Suisse, as the case may be, is equal to or greater than U.S. $[ ],
Scotiabank or Credit Suisse, as the case may be, agrees to continue to provide
the Swing Line Commitment. At the time of each assignment pursuant to this
subsection 11.8(b) to a Person which is not already a Lender hereunder within
the same Facility, the respective assignee Lender shall provide to the Borrowers
and the Administrative Agent the appropriate forms and certificates described in
subsection 4.1(f), as appropriate. To the extent that an assignment of all or
any portion of a Lender's Commitments and related outstanding Obligations
pursuant to this subsection 11.8(b) would, at the time of such assignment,
result in increased costs under Section 4.1, 4.3 or 4.4 from those being charged
by the respective assigning Lender prior to such assignment, then the Borrowers
shall not be obligated to pay such increased costs (although the Borrowers shall
be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).
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(c) From and after the date that the Administrative Agent notifies
the assignor Lender that it has received (and provided its consent and, to the
extent required, received the consents of the Borrowers, the Swing Line Lender
and the L/C Lender with respect to) an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights hereunder have been
assigned to it and obligations hereunder have been assumed by it pursuant to
such Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan Documents.
(d) Any Lender may at any time sell to one or more commercial banks
or other Persons not Affiliates of either Borrower (a "Participant")
participating interests in any Loan, the Commitment of such Lender and the other
interests of such Lender (the "originating Lender") hereunder and under the
other Loan Documents; provided, however, that (i) the originating Lender's
obligations under this Agreement shall remain unchanged, (ii) the originating
Lender shall remain solely responsible for the performance of such obligations,
(iii) the Borrowers, the Swing Line Lender, the L/C Lender, the Agent and the
Administrative Agent shall continue to deal solely and directly with the
originating Lender in connection with the originating Lender's rights and
obligations under this Agreement and the other Loan Documents, and (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would (i) extend the final scheduled maturity
of any Loan, Note or Letter of Credit (unless such Letter of Credit is not
extended beyond the Termination Date) in which such Participant is
participating, or reduce the rate or extend the time of payment of interest or
fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the Participant's participation over the amount
thereof then in effect (it being understood that a waiver of any condition,
covenant, violation, Event of Default or Unmatured Event of Default shall not
constitute a change in the terms of such participation, and that an increase in
any Revolving Facility Commitment or Revolving Facility Loan shall be permitted
without the consent of any Participant if the Participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
either Borrower of any of its rights and obligations under this Agreement or
(iii) release all or substantially all of the Collateral under all of the
Security Documents (except as expressly provided in the Loan Documents)
supporting the Loans hereunder in which such Participant is participating. In
the case of any such participation, the Participant shall be entitled to the
benefit of Sections 2.15, 4.1, 4.3, 4.4, 4.6 and 11.4 as though it were also a
Lender hereunder (provided that the originating Lender and not the Borrowers
shall be obligated to pay any amount under Section 4.1, 4.3, 4.4 or 4.6 to any
Participant which
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is greater than a Borrower would have been required to pay to the originating
Lender if no such participation had been sold), and if amounts outstanding under
this Agreement are due and unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, the
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement. Each originating Lender shall indemnify and hold
harmless the Borrowers and each Agent from and against any taxes, penalties,
interest and other costs and losses (including Attorney Costs) incurred or
payable by the Borrowers or Agent as a result of the failure of the Borrower or
the Agent to comply with its obligations to deduct or withhold any Taxes from
any payments made pursuant to this Agreement to such Lender or the Agent, as the
case may be, which Taxes would not have been incurred or payable if such
Participant had been a Lender that had complied with the requirements of
subsection 4.1(f).
(e) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and any Note held by
it in favor of any Federal Reserve Bank in accordance with Regulation A and any
Operating Circular issued by such Federal Reserve Bank. No such assignment shall
release the assigning Lender from its obligations hereunder.
(f) Each Borrower shall and shall cause each of its Subsidiaries to
assist any Lender in effectuating any assignment or participation pursuant to
this subsection 11.8(f) (including during syndication) in whatever manner such
Lender reasonably deems necessary, including the participation in meetings with
prospective Transferees.
11.9. Confidentiality. (a) Each of the Lenders agrees that it will
use its reasonable efforts not to disclose without the prior consent of the
Borrowers (other than to its employees, auditors, counsel or other professional
advisors, to Affiliates or to another Lender if the Lender or such Lender's
holding or parent company in its sole discretion determines that any such party
should have access to such information) any information with respect to the
Borrowers or any of their Subsidiaries which is furnished pursuant to this
Agreement; provided, however, that any Lender may disclose any such information
(a) as has become generally available to the public, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (c) as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation (provided that the
Borrowers shall be afforded prior notice thereof and a reasonable opportunity to
contest such summons or subpoena; it being understood, however, that the Agents
and Lenders shall be permitted in any event to comply with such
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summons or subpoena), (d) to comply with any law, order, regulation or ruling
applicable to such Lender, and (e) to any prospective transferee in connection
with any contemplated transfer of any of the Notes or any interest therein by
such Lender; provided, however, that such prospective transferee executes an
agreement with such Lender containing provisions substantially identical to
those contained in this Section 11.9.
(b) Each of the Borrowers hereby acknowledges and agrees that each
Lender may share with any of its Affiliates any information related to the
Borrowers or any of their Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of the Borrowers
and their Subsidiaries, provided that such Persons shall be subject to the
provisions of this Section 11.9 to the same extent as such Lender).
11.10. Set-off. In addition to any right or remedy of the Lenders
now or hereafter provided by law, and not by way of limitation of any such right
or remedy, during the continuance of an Event of Default such Lender is
authorized at any time and from time to time, without prior notice to the
Borrowers, any such notice being waived by the Borrowers to the fullest extent
permitted by law, to set off and to appropriate and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender (including by branches
and agencies of such Lender wherever located) to or for the credit or the
account of the applicable Borrower against such amount, irrespective of whether
or not any Administrative Agent or such Lender shall have made demand under this
Agreement or any Loan Document, including all interests in Obligations of such
Loan Party purchased by such Lender pursuant to Section 2.16, and all other
claims of any nature or description arising out of or connected with any Loan
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured. Each Lender agrees promptly to notify the
applicable Borrower and the Administrative Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
11.11. Notification of Addresses, Lending Offices, etc. Each Lender
shall notify the Administrative Agent in writing of any change in the address to
which notices to such Lender should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.
11.12. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of which taken together shall be deemed to constitute but one
and the same instrument. Any of the parties hereto may execute this Agreement by
signing any such counterpart.
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11.13. Severability; Modification to Conform to Law. It is the
intention of the parties that this Agreement be enforceable to the fullest
extent permissible under applicable law, but that the unenforceability (or
modification to conform to such law) of any provision or provisions hereof shall
not render unenforceable, or impair, the remainder hereof. If any provision of
this Agreement shall be held invalid or unenforceable in whole or in part in any
jurisdiction, this Agreement shall, as to such jurisdiction, be deemed amended
to modify or delete, as necessary, the offending provision or provisions and to
alter the bounds thereof in order to render it or them valid and enforceable to
the maximum extent permitted by applicable law, without in any manner affecting
the validity or enforceability of such provision or provisions in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
11.14. No Third Parties Benefitted. This Agreement is made and
entered into for the sole protection and legal benefit of the Borrowers, the
Lenders, the Agents and the Affiliates of the Agents, and their permitted
successors and assigns, and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any other Loan Document.
11.15. Governing Law; Submission to Jurisdiction; Venue. (a) THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE SET FORTH THEREIN,
BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THEREOF. Any legal action
or proceeding with respect to this Agreement or any other Loan Document may be
brought in the courts of the State of New York or of the United States for the
Southern District of New York and, by execution and delivery of this Agreement,
each Loan Party hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Loan Party hereby further irrevocably waives any claim that any
such courts lack jurisdiction over such Loan Party, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement or any
other Loan Document brought in any of the aforesaid courts, that any such court
lacks jurisdiction over such Loan Party. Each Loan Party irrevocably consents to
the service of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such Loan Party, at
its address for notices pursuant to Section 11.2, such service to become
effective 30 days after such mailing. Each Loan Party hereby irrevocably waives
any objection to such service of process and further irrevocably agrees not to
plead or claim in any action or proceeding commenced hereunder or under any
other Loan Document that service of process was in any way invalid or in
effective. Nothing herein shall affect the right of any Agent, any Lender or the
holder of any Note to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against any Loan Party in any
other jurisdiction.
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(b) Each Borrower on its own behalf and on behalf of each other Loan
Party hereby irrevocably waives any objection which it may now or hereafter have
to the laying of venue of any of the aforesaid proceedings arising out of or in
connection with this Agreement or any other Loan Document brought in the courts
referred to in clause (a) above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that any such proceeding brought in any
such court has been brought in an inconvenient forum.
11.16. Waiver of Jury Trial. Each of the parties to this Agreement
hereby irrevocably waives all right to a trial by jury in any proceeding or
counterclaim arising out of or relating to this Agreement, any other Loan
Document or any of the transactions contemplated hereby or thereby. In the event
of litigation, this Agreement may be filed as a written consent to a trial by
the court.
11.17. Judgment. If, for the purpose of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Loan Document
in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of each of the
Borrowers in respect of any such sum due from it to the Administrative Agent
hereunder or under any other Loan Document shall, notwithstanding any judgment
in a currency (the "Judgment Currency") other than that in which such sum is
denominated in accordance with the applicable provisions of this Agreement (the
"Agreement Currency"), be discharged only to the extent that on the Business Day
following receipt by the Administrative Agent of any sum adjudged to be so due
in the Judgment Currency, such Administrative Agent may in accordance with
normal banking procedures purchase the Agreement Currency with the Judgment
Currency. If the amount of the Agreement Currency so purchased is less than the
sum originally due to the Administrative Agent in the Agreement Currency, each
Borrower agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify such Administrative Agent or the Person to whom such obligation was
owing against such loss. If the amount of the Agreement Currency so purchased is
greater than the sum originally due to the Administrative Agent in such
currency, such Administrative Agent agrees to return the amount of any excess to
the applicable Borrower (or to any other Person who may be entitled thereto
under applicable law).
11.18. Prior Understandings. This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among the
Borrowers, the Lenders and the Agents, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof, except that the
following shall continue to remain in effect: (a) the Commitment Letter (other
than (A) the Term Sheet (as defined in the Commitment Letter) and (B) the
commitments of Merrill Lynch & Co. or Merrill Lynch Capital Corporation
thereunder) and (b) the Fee Letters.
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11.19. Survival. The obligations of the Borrowers under Article IV
and Sections 11.4, 11.15 and 11.16 shall survive the repayment of the Loans and
other Obligations and the termination of the Commitments and, in the case of any
Lender that may assign any interest in its Commitments, Loans or Letter of
Credit interest hereunder, shall survive the making of such assignment,
notwithstanding that such assigning Lender may cease to be a "Lender" hereunder.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
MT ACQUISITION CORP., as a Borrower
By:____________________________________
Title:
METTLER-TOLEDO HOLDING AG,
as a Borrower
By:____________________________________
Title:
METTLER-TOLEDO HOLDING INC.,
as Guarantor
By:____________________________________
Title:
GARVENS AUTOMATED GmbH,
GIESSEN, as a Subsidiary Swing Line
Borrower
By:____________________________________
Title:
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METTLER-TOLEDO GmbH, GIESSEN,
as a Subsidiary Swing Line Borrower
By:____________________________________
Title:
METTLER-TOLEDO S.A., VEROFLOY
as a Subsidiary Swing Line Borrower
By:____________________________________
Title:
METTLER-TOLEDO K.K., TUKARAZUKA
as a Subsidiary Swing Line Borrower
By:____________________________________
Title:
METTLER-TOLEDO B.V., TIEL
as a Subsidiary Swing Line Borrower
By:____________________________________
Title:
METTLER-TOLEDO (ALBSTADT) GmbH,
ALBSTADT as a Subsidiary Swing Line
Borrower
By:____________________________________
Title:
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METTLER-TOLEDO AG, GREIFENSEE
as a Subsidiary Swing Line Borrower
By:____________________________________
Title:
MERRILL LYNCH & CO., as Arranger
and Documentation Agent
By:____________________________________
Title:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:____________________________________
Title:
CREDIT SUISSE,
as Co-Agent
By:____________________________________
Title:
LEHMAN COMMERCIAL PAPER INC.,
as Co-Agent
By:____________________________________
Title:
MANAGEMENT AGREEMENT
AGREEMENT made as of October _, 1996 by and between METTLER-
TOLEDO, INC., a Delaware corporation (the "Corporation"), and AEA INVESTORS
INC., a Delaware corporation ("AEA").
WHEREAS, AEA rendered certain investment banking services to the
Corporation since the date of the acquisition by the Corporation's affiliate of
the stock or other equity interests and certain indebtedness of the entities
comprising the Mettler-Toledo Group of AG Fur Prazisionsinstrumente
Greifensee, Switzerland and the financing related thereto;
WHEREAS, AEA also rendered advisory services to selected client companies,
and the Corporation desires to retain AEA to render advisory and consulting
services to it and AEA is willing to provide such services on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, it is mutually agreed as follows:
1. The Corporation hereby retains AEA to render advisory and consulting
services to the Corporation, and AEA hereby agrees to render such services,
for the period commencing on the date hereof and continuing so long as
AEA owns any securities of MT Investors Inc., a Delaware corporation. AEA shall
render such advisory and consulting services to the Corporation in connection
with such financial, management and other matters relating to the business
and operations of the Corporation, or any of its subsidiaries or affiliated
companies, as the Corporation's Board of Directors may from time to time
request.
2. As compensation for AEA's advisory and consulting services rendered
pursuant to Section 2 hereof, the Corporation will pay, and AEA will accept, so
<PAGE>
long as this Agreement continues in effect, a fee at the rate of $1,000,000
per year payable quarterly in advance, on the first day of each calendar
quarter, commencing as of November 1, 1996. The parties hereto will also enter
into an Indemnification Agreement substantially in the form of Exhibit A
hereto (the "Indemnification Agreement").
(a) It is the understanding of the parties that AEA may be involved with
potential acquisitions, mergers, financing or other major transactions
involving the Corporation, in which case AEA shall be entitled to such
compensation, in addition to the annual fee provided above, as the Corporation
and AEA shall mutually agree.
(b) In the event that the Corporation employs any employee of AEA as an
officer of the Corporation or otherwise, and such employment involves a
substantial amount of such employee's time, the Corporation shall compensate
such employee at a reasonable rate to be agreed upon among such employee, the
Corporation and AEA, and the compensation payable to such employee by the
Corporation shall not reduce or affect in any way the fees payable to AEA
hereunder.
In addition to the aforementioned fees, the Corporation shall reimburse AEA
for its reasonable out-of-pocket costs and expenses incurred in connection with
the performance of its advisory and consulting services hereunder.
3. Any notice required to be given hereunder shall be in writing and shall
be deemed sufficient if delivered in person or mailed by certified mail as
follows: if to the Corporation, to it at its office at Mettler-Toledo AG, Im
Langacher, CH-8606 Greifensee, Switzerland or such other address as the
Corporation may hereafter designate for that purpose; and if to AEA, to it at
its office at Park Avenue Tower, 65 East 55th Street, New York, New York 10022,
or such other address as AEA may hereafter designate for that purpose.
- 2 -
<PAGE>
4. This Agreement, together with the Indemnification Agreement, constitutes
the entire agreement between the parties and supersedes all prior agreements and
understandings, both written and oral, with respect to the subject matter
hereof. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, including any
corporation into which the Corporation shall consolidate or merge or to which it
shall transfer substantially all of its assets. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed entirely within such state.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date and year first above written.
METTLER-TOLEDO, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
AEA INVESTORS INC.
By:__________________________________
Name:________________________________
Title:_______________________________
- 3 -
<PAGE>
EXHIBIT A
INDEMNIFICATION AGREEMENT
AGREEMENT made as of October __, 1996 by and between METTLER-TOLEDO,
INC., a Delaware corporation (the "Corporation") and AEA INVESTORS INC., a
Delaware corporation ("AEA").
Reference is made to the Management Agreement of even date herewith
by and between the Corporation and AEA.
As part of the consideration for the agreement of AEA to furnish its
services under the Management Agreement, the Corporation agrees to indemnify and
hold harmless AEA and its affiliates and the respective managing directors,
officers, directors, shareholders, employees and agents of, and persons
controlling, AEA or any of its affiliates within the meaning of either Section
15 of the Securities Act of 1933, as amended, or Section 20 of the Securities
Act of 1934, as amended, and each of their respective successors and assigns
(collectively, the "indemnified persons") from and against all claims,
liabilities, expenses, losses or damages (or actions in respect thereof) related
to or arising out of actions taken (or omitted to be taken) by AEA pursuant to
the terms of the Management Agreement, or AEA's role in connection therewith;
provided, however, that the Corporation shall not be responsible for any claims,
liabilities, expenses, losses and damages to the extent that it is finally
judicially determined that they result primarily from actions taken or omitted
to be taken by AEA in bad faith or due to AEA's gross negligence or willful
misconduct. If for any reason (other than the bad faith, gross negligence or
willful misconduct of AEA as provided above) the foregoing indemnity is
unavailable to AEA or insufficient to hold AEA harmless, then the Corporation
shall contribute to the amount paid or payable by AEA as a result of such claim,
liability, expense, loss or damage in such proportion as is appropriate to
reflect not only the relative benefits received by the Corporation on the one
hand and AEA on the other but also the relative fault of the Corporation and
AEA, as well as any relevant equitable considerations, subject to the
limitations that in any event AEA's aggregate contribution to all claims,
expenses, losses, liabilities and damages shall not exceed the amount of fees
actually received by AEA pursuant to the Management Agreement. Promptly after
receipt by AEA of notice of any complaint or the commencement of any action or
proceeding with respect to which indemnification may be sought against the
Corporation, AEA will notify the Corporation in writing of the receipt or
commencement thereof, but failure to notify the Corporation will relieve the
Corporation from any liability which it may have hereunder only if, and to the
extent that, such failure results in the forfeiture of substantial rights and
defenses, and will not in any event relieve the Corporation from any other
obligation to any indemnified person other than under this indemnification
agreement. The Corporation shall assume the defense of such action
<PAGE>
(including payment of fees and disbursements of counsel) insofar as such action
shall relate to any alleged liability in respect of which indemnity may be
sought against the Company. AEA shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
disbursements of such counsel shall be at the expense of AEA unless employment
of such counsel has been specifically authorized by the Corporation in writing.
The Corporation shall pay the fees and expenses of one separate counsel for AEA
and any other indemnified persons if the named parties to any such action
(including any impleaded parties) include the Corporation (or any of the
directors of the Corporation) and AEA and (i) in the good faith judgment of AEA
the use of joint counsel would present such counsel with an actual or potential
conflict of interest, or (ii) AEA shall have been advised by counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the Corporation (or the director(s)). The
Corporation shall not be liable to indemnify any person for any settlement of
any claim or action effected without the Corporation's written consent, which
consent shall not be unreasonably withheld. In addition, the Corporation agrees
to reimburse AEA and each other indemnified person for all expenses (including
reasonable fees and disbursements of counsel if the Corporation does not assume
the defense of such action) as they are incurred by AEA, or any indemnified
person in connection with investigating, preparing or defending any such action
or claim. AEA shall have no liability to the Corporation or any other person in
connection with the services which they render pursuant to the Management
Agreement, except for AEA's bad faith, gross negligence or willful misconduct
judicially determined as aforesaid. The indemnification, contribution and
expense reimbursement obligation the Corporation has under this paragraph shall
be in addition to any liability the Corporation may otherwise have.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first written above.
METTLER-TOLEDO, INC.
By:
-----------------------
Name:
Title:
AEA INVESTORS INC.
By:
-----------------------
Name:
Title:
TAX SHARING AGREEMENT
THIS AGREEMENT, dated as of October __, 1996, is by
and between MT Investors Inc., a Delaware corporation ("Investors"),
and Mettler-Toledo, Inc., a Delaware corporation ("Corp.").
W I T N E S S E T H:
The parties hereto agree as follows:
1. Definitions. For the purposes of this Agreement,
the following terms shall be defined as follows:
(a) "Affiliated Group" shall mean a group of
corporations described in Section 1504(a) of the Code which
files a consolidated U.S. federal income tax return.
(b) "AMT" shall mean the alternative minimum
tax imposed by Section 55(a) of the Code.
(c) "Code" shall mean the Internal Revenue
Code of 1986, as amended.
(d) "Corp. Group" shall mean Corp. and all of
its U.S. subsidiaries which are members of the Investors
Group.
(e) "Corp. Group Separate Tax Liability"
for a Taxable Year shall mean the liability for U.S.
federal income tax (including AMT, if any) (as
determined under Section 5 below) of the Corp. Group
computed as though the Corp. Group filed a
consolidated U.S. federal income tax return separate
from the Investors Group for such taxable period and
all prior taxable periods, which amount shall not be
less than zero.
(f) "Current Year" shall have the meaning set
forth in Section 8.
(g) "Formula Amount" shall have the meaning
set forth in Section 4.
(h) "Investors Group" shall mean the
Affiliated Group for U.S. tax purposes of which Investors is
the common parent.
<PAGE>
(i) "Investors Group Tax Liability" for a
Taxable Year shall mean the actual liability of the Investors
Group for U.S. federal income tax (including AMT, if any)
for such Taxable Year.
(j) "Investors Separate Group" shall mean the
Investors Group, excluding all members of the Corp. Group.
(k) "Investors Separate Tax Liability" for
a Taxable Year shall mean the liability for U.S.
federal income tax (including AMT, if any) (as
determined under Section 5) of the Investors Group
computed as though no member of the Corp. Group had
ever been a member of the Investors Group, which
amount shall not be less than zero.
(l) "IRS" shall mean the Internal Revenue
Service.
(m) "Measuring Date" shall have the meaning
set forth in Section 6.
(n) "Separate Tax Liability" shall mean the
Investors Separate Tax Liability or the Corp. Group Separate
Tax Liability, as the case may be.
(o) "Taxable Year" shall mean the period for
which a U.S. federal income tax return is made.
Capitalized terms used herein without definitions and defined or
referenced in the Credit Agreement, dated as of October __, 1996,
between Mettler-Toledo Holdings, Inc., as Guarantor, MT Acquisition
Corp. (to be merged into Corp.) and Mettler-Toledo Holdings AG, as
Borrowers, certain commercial lending institutions and Merrill Lynch &
Co., as Arranger and Documentation Agent, The Bank of Nova Scotia, as
Administrative Agent, and Credit Suisse and Lehman Commercial Paper
Inc., as Co-Agents (the "Credit Agreement") shall have the meanings
ascribed thereto in the Credit Agreement.
2. This is the Tax Sharing Agreement contemplated by
the Credit Agreement and the Prospectus dated October __, 1996 to the
__% Senior Subordinated Notes 2006.
3. Investors shall pay to the IRS the entire
Investors Group Tax Liability and shall indemnify and hold harmless
each member of the Corp. Group with respect to any Investors Group Tax
Liability paid to the IRS by such member (including by reason of
Section 1.1502-6 of the Treasury Regulations) for any Taxable Year
during which such member was a party to this Agreement, subject in the
case of members of the Corp. Group to offset by any amount due to
Investors from the Corp. Group pursuant to
-2-
<PAGE>
this Agreement. Corp. consents, on behalf of itself and each member of the Corp.
Group, to the filing with Investors of consolidated U.S. federal income tax
returns for the Current Year and subsequent years, and in connection therewith,
agrees to file and to cause each other member of the Corp. Group to file, a Form
1122 to be attached to the initial Investors Group consolidated U.S. federal
income tax return.
4. Subject to the provisions of Sections 5 and 6
below, on each due date for the payment of any Investors Group Tax
Liability (or any portion thereof, including installments of estimated
tax) by Investors for each Taxable Year in which Investors and the
Corp. Group are included in the same Affiliated Group, Corp. shall pay
to Investors an amount (the "Formula Amount") equal to the product of
(a) the Investors Group Tax Liability (or portion thereof) to be paid
on such date by Investors to the IRS and (b) a fraction of which (i)
the numerator is the estimate of the Corp. Group Separate Tax
Liability (or appropriate portion thereof) and (ii) the denominator is
the sum of the estimates of the Corp. Group Separate Tax Liability (or
appropriate portion thereof) and the Investors Separate Tax Liability
(or appropriate portion thereof) for such Taxable Year (or appropriate
portion thereof). A final determination of the Formula Amount shall be
made no later than 90 days after the filing of the Investors Group
consolidated U.S. federal income tax return for any Taxable Year. If
such final determination reveals that amounts previously paid by Corp.
to Investors for such Taxable Year were less than the Formula Amount,
as so finally determined, Corp. shall pay to Investors the additional
amount due, with any interest owed thereon to the IRS, within 30 days
of such final determination. If such final determination reveals that
amounts previously paid by Corp. to Investors for such Taxable Year
were more than the Formula Amount, as so finally determined, Investors
shall pay to Corp. such excess amount, with any interest paid thereon
by the IRS, within 30 days after such final determination or, if
later, within 30 days after the receipt of a refund thereof by
Investors from the IRS. If as the result of an audit or otherwise,
there are adjustments which increase the Formula Amount, or interest
or penalties with respect thereto, for a Taxable Year, Corp. shall
make additional payments to Investors together with any interest and
penalties that such adjustments require to be paid to the IRS. If as
the result of an audit or otherwise there are adjustments which
decrease the Formula Amount for a Taxable Year, the amount of any such
overpayment shall be paid to Corp. by Investors together with
interest, if any, to the extent that such adjustments require the
payment of interest by the IRS to Investors. Payments by or to Corp.
required as the result of adjustments shall be made promptly after the
final determination of such adjustments or, in the case of amounts
owed by Investors to Corp., if later, within 30 days after the receipt
of a refund thereof by Investors from the IRS. Any interest paid or
received by Corp. pursuant to this Section 4 shall be considered an
item attributable to it and not to Investors in determining the
Investors Separate Tax Liability and the Corp. Group Separate Tax
Liability.
5. The Investors Separate Tax Liability and the
Corp. Group Separate Tax Liability shall be computed as if the members
of each such Group filed a separate
-3-
<PAGE>
consolidated tax return for such members (or, in the case of the Investors
Separate Group, a separate return if Investors is the only member of such Group)
except that such computation shall (1) apply the separate tax liability
adjustment principles of Treas. Reg. Section 1.1552-1(a)(2)(ii), or any
successor provision thereto, as they would apply between (i) the Investors
Separate Group and (ii) the Corp. Group (2) be consistent with the elections
made, and the tax positions taken in determining the Investors Group Tax
Liability, and (3) be in accordance with Section 8.
6. If the cumulative amount of tax borne by the
Investors Separate Group or the Corp. Group under Section 4 and this
Section 6 is greater by the end of any Taxable Year (a "Measuring
Date") than the amount of such group's cumulative Separate Tax
Liability through that Measuring Date, the other group shall pay to
such group the amount of such excess, but the amount of such payment
shall not exceed the amount by which the paying group's cumulative
liability under Section 4 and this Section 6 has been less than its
cumulative Separate Tax Liability through that Measuring Date. The
amounts under the preceding sentence shall be computed on a cumulative
basis beginning with the Current Year. Notwithstanding anything, to
the contrary in this Agreement if, as is currently contemplated, the
members of the Investors Separate Group engage in no material activity
other than holding directly or indirectly the stock of Corp., the
Corp. Group shall bear and fund all of the Investors Group Tax
Liability and all the liabilities described in Section 7.
7. In the event that any member of the Investors
Separate Group files a combined or consolidated state, local or
foreign income tax return with any member of the Corp. Group or files
any return for a tax based on capital that includes the capital of any
member of the Corp. Group, the provisions of Sections 1 through 6
shall apply mutatis mutandis to any such taxes as if such returns were
consolidated U.S. federal income tax returns. Any amount borne by
members of the Corp. Group or members of the Investors Separate Group
pursuant to this Section 7 shall be considered an item attributable to
it and not to the other in determining each group's Separate Tax
Liability.
8. In computing Investors Separate Tax Liability,
any losses or credits shall not be carried back to a Taxable Year
prior to the current Taxable Year of the Investors Group (the "Current
Year"). This Agreement and any agreements executed in connection
herewith constitute the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersede all prior and
contemporaneous agreements and understandings of the parties in
connection therewith.
9. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto
and their respective successors. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Tax Sharing Agreement as of the date first above
written.
MT INVESTORS INC.
By
---------------------------
Title:
METTLER-TOLEDO, INC.
By
---------------------------
Title:
-5-
Exhibit 21.1
Subsidiaries of the Company
The following will be direct or indirect subsidiaries of the Issuer following
consummation of the Acquisition:
Austria
Mettler-Toledo Ges.m.b.H.
Australia
Mettler-Toledo Limited
Belgium
N.V. Mettler-Toledo S.A.
Bermuda
MT FinCo Ltd.
Brazil
Mettler-Toledo Industria e Commercio Ltda.
Canada
Mettler-Toledo Inc.
China
Changzhou Toledo Electronic Scale Ltd.
Mettler-Toledo Instruments (Shanghai) Ltd.
Mettler-Toledo Int. Trading (Shanghai) Corp.
Croatia
Mettler-Toledo d.o.o.
Czech Republic
Mettler-Toledo spol. s.r.o.
Denmark
Mettler-Toledo A/S
France
Mettler-Toledo SA
Mettler-Toledo Analyse Industrielle S.a.r.l.
Ohaus S.a.r.l.
Germany
Mettler-Toledo Holding Deutschland GmbH
Mettler-Toledo (Albstadt) GmbH
<PAGE>
Garvens Automation GmbH
Mettler-Toledo GmbH
Getmore Gesell fur Marketing & Media Service mbH
Ohaus Waagen Vertriebsgellshaft mbH
Mettler-Toledo Beteiligungen GmbH
Hong Kong
Mettler-Toledo (HK) Ltd.
Hungary
Mettler-Toledo Kereskedelml Kft.
Italy
Grandi Impianti Mettler-Toledo S.r.l.
Mettler-Toledo S.p.A.
Japan
Mettler-Toledo K.K.
Mexico
Mettler-Toledo S.A. de C.V.
Ohaus de Mexico S.A. de C.V.
Netherlands
Mettler-Toledo BV
Mettler-Toledo Holdings DV
Norway
Mettler-Toledo A/S
Cargoscan A/S
Cargoscan Holdings A/S
Poland
Mettler-Toledo Sp. z.o.o.
Singapore
Mettler-Toledo (S.E.A.) Pte. Ltd.
Slovak Republic
Mettler-Toledo Service s.r.o.
Mettler-Toledo spol. s.r.o.
Slovenia
Mettler-Toledo d.o.o.
Spain
Mettler-Toledo S.A.E.
<PAGE>
Sweden
Mettler-Toledo AB
Switzerland
Mettler-Toledo Holding AG
Mettler-Toledo AG
Mettler-Toledo Logistile AG
Mettler-Toledo (Schweiz) AG
Microwa Prazisionswaagen AG
Thailand
Mettler-Toledo (Thailand) Ltd.
United Kingdom
Mettler-Toledo Ltd.
United States of America
Hi-Speed Checkweigher Co., Inc. (NY)
Mettler-Toledo Process Analytical, Inc. (MA)
Ohaus Corp. (NJ)
<PAGE>
EXHIBIT 23.1
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' REPORT ON SCHEDULE AND CONSENT
The Board of Directors
Ciba Geigy AG
The audits of Mettler-Toledo Group (the 'Group') referred to in our report dated
February 5, 1996, included the related financial statement schedule as of
December 31, 1995 and 1994, and for each of the years in the three-year period
ended December 31, 1995, included in the registration statement. The financial
statement schedule is the responsibility of the Group's management. Our
responsibility is to express an opinion on the financial statement schedule
based on our audits. In our opinion, such financial statement schedule when
considered in relation to the combined financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
We consent to the use of our report with respect to Mettler-Toledo Group
included herein and to the reference to our firm under the headings 'Selected
Historical Financial Information' and 'Independent Auditors' in the Prospectus.
KPMG FIDES PEAT
October 1, 1996
Zurich, Switzerland
<PAGE>
EXHIBIT 23.2
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Shareholder
MT Acquisition Corp.
We consent to the use of our report with respect to MT Acquisition Corp.
included herein and the reference to our firm under the heading 'Independent
Auditors' in the Prospectus.
KPMG FIDES PEAT
October 1, 1996
Zurich, Switzerland
<PAGE>
EXHIBIT 23.3
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Shareholder
Mettler-Toledo Holding Inc.
We consent to the use of our report with respect to Mettler-Toledo Holding Inc.
included herein and the reference to our firm under the heading 'Independent
Auditors' in the Prospectus.
KPMG FIDES PEAT
October 1, 1996
Zurich, Switzerland
